KARACHI, May 17: Home remittances or the money sent back home by overseas Pakistanis plus some other inflows shot up to $1.865 billion during July/April 2001-02 from $922 million in a year-ago period.
A SBP statement issued on Friday said out of $1.865 billion total home remittances about $1.782 billion were sent back home by overseas Pakistanis. The remaining $83 million came in the shape of encashment of foreign currency bearer certificates; foreign exchange bearer certificates; Hajj remittances and the remittances from Iraq-Kuwait war victims.
The $1.782 billion sent back home by overseas Pakistanis in the first 10 months of this fiscal year shows a 137 per cent growth when compared with $751 million remittances sent back home in a year-ago period.
The SBP said overseas Pakistanis remitted about $239 million in the month of April 2002: In April 2001 they had remitted only $67.4 million.
Since remittances being the second largest source of foreign exchange earning after exports have a direct bearing on Pakistan’s balance of payments higher remittances would help the country post a larger current account surplus at the end of the fiscal year: In the first nine months current account surplus has already crossed $2 billion mark.
The inflow of home remittances picked up after September 11 terror attacks on the US that gave birth to stricter anti-money laundering laws across the globe. That drove many Pakistanis who had amassed ill-gotten wealth in foreign bank accounts to shift part of that money back to Pakistan. What helped them do so was a presidential ordinance issued after September 11 events that assured the foreign currency account holders in Pakistan that the government would not ask them to disclose the source from where the money had come.
The combined effect of this and some other factors was that the gap between the inter-bank and open market exchange rates started falling — and soon the two rates became almost equal. That in turn encouraged overseas Pakistanis to send back home their foreign exchange earning through banking channels rather than through Hundi. Hence the buildup in home remittances.
Senior bankers say their timely effort to speed up handling of home remittances also helped the country get more of foreign exchange through this source.