[🇵🇰] Remittances from Overseas Pakistanis

[ghazi]

Remittances surge by 13% to $2.38b in Dec 2023​

Stability in rupee-dollar parity, crackdown on illegal networks boost numbers

Salman Siddiqui
January 11, 2024

design: Ibrahim Yahya

The inflows of workers’ remittances sent home by overseas Pakistanis increased by 13% to $2.38 billion in December 2023, as they dispatched the funds through official channels following the return of stability in the rupee-dollar parity and the crackdown against illegal currency networks.

The improvement in remittances fuelled the ongoing gradual rally in the rupee against the US dollar on Wednesday, strengthening the market view that the balance of the current account would record a surplus for the second consecutive month of December 2023.

The State Bank of Pakistan (SBP) reported that remittances rose by 13% compared to $2.10 billion in the same month of December of the previous year.

Inflows improved by 5.5% in the month compared to $2.26 billion in the prior month of November 2023.

However, workers’ remittances have cumulatively slowed down by 7% in the first half (Jul-Dec) of the current fiscal year 2023-24, amounting to $13.45 billion compared to $14.42 billion in the same period of the previous year, according to the central bank.

Topline Securities, CEO, Muhammad Sohail mentioned that the latest monthly inflows of $2.38 billion are higher than the full-year 2023 average of $2.20 billion a month.

Market talk suggests that the receipts have increased due to the crackdown against foreign currency smugglers, such as hawala-hundi operators and hoarders, since September 2023.

The cleanup operation crushed illicit currency markets, especially in the bordering areas with Afghanistan, and strengthened the hold of off

Remittances surge by 13% to $2.38b in Dec 2023 | The Express Tribune

Stability in rupee-dollar parity, crackdown on illegal networks boost numbers

tribune.com.pk

 

[ghazi]

Remittance inflows​

Home remittances rose by 13.4 percent in December 2023 compared to the same month a year ago - to 2.4 billion dollars against 2.099 billion dollars. Three observations are in order.

First, the decline in remittances in December last year is exclusively attributable to the then Finance Minister Ishaq Dar’s extremely flawed policy to control the rupee-dollar parity without the foreign exchange reserves to intervene in the market that, in turn, led to multiple exchange rates with the differential between the hundi/hawala rate and the interbank rate as high as 40 to 45 rupees per dollar, fuelling the re-emergence of the illegal hawala mechanism.

It is relevant to note that this inane policy was implemented by Ishaq Dar during his third tenure as finance minister (2013-17), which led to the country experiencing the highest-ever current account deficit of 20 billion dollars in 2018 with, at the time, foreign exchange reserves propped up by massive borrowing, the cost of which the country continues to pay to this day.

Thus, to compare inflows in 2023 with 2022 data, especially after the agreement on the Stand-By Arrangement with the International Monetary Fund was reached on 29 June 2023 whose major component was a reversal of the control over the rupee-dollar parity may not quite be comparing apples and oranges but it certainly qualifies as comparing tangerines with oranges.

Secondly, what is highly disturbing is that inward inflows of remittances during the first six months of the current fiscal year are lower than the comparable period of the year before – 13.4 billion dollars this year against 2022’s 14.417 billion dollars - a decline of nearly 7 percent. It is relevant to note that Dar took oath on 27 September 2022 and hence the control of the rupee did not begin till October 2022 and therefore the recent rise in remittance inflows should not be a source of comfort for the stakeholders.

In addition, it is also concerning that the inflow rise is sourced to European countries rather than from the two existing major sources of remittance inflows - Saudi Arabia and the United Arab Emirates - countries which remained a primary source of remittances for Pakistan - though inflows from the two countries suffered a significant decline in the first six months of the current year, from Saudi Arabia remittance inflows declined by 8.9 percent and from the UAE by 10.9 percent. In the case of Saudi Arabia it is pertinent to mention that unlike the previous practice it has now started allowing some more categories of workers to live with their families in the kingdom. This is bound to adversely impact remittance flows back home.

And finally, focusing on a percentage rise rather than on total inflows appears to be an attempt to undermine the post-Covid-19 importance of remittance inflows as a percentage of the desired foreign exchange earnings particularly as they surpassed exports in fiscal year 2021.

In December 2021 remittance inflows were a high of 2520.4 million dollars against the 2381.5 million dollars in December 2023 – or a decline of nearly 6 percent. And this decline in spite of the decision announced by the Caretaker finance minister dated 15 September 2023 that an unbudgeted 80 billion rupees would be allocated to re-energize the flow of remittances through official channels.

Twenty billion rupees was released to the State Bank of Pakistan the next day, with no further reported disbursements on this account, however other than claiming an uptick in remittance inflows due to measures taken there is no update on how the taxpayers’ money was spent and whether the rise in inflows in December 2023 is seasonal or due to the disbursed 20 billion rupees or indeed due to meeting the IMF prior Stand-By Arrangement condition to ensure a market-determined exchange rate.

While one can understand the need to present data in a positive light for the economic team leaders, a fact that can be supported by focusing on percentages when the totals are low, yet there is a need to carefully balance this approach with the limitations it may place on the team leaders to take appropriate timely mitigating measures.

Remittance inflows

EDITORIAL: Home remittances rose by 13.4 percent in December 2023 compared to the same month a year ago - to 2.4...

www.brecorder.com

 

[ghazi]

 

[ghazi]

Inflow of overseas workers’ remittances clocked in at $2.4 billion in January 2024, 1% higher on a month-on-month basis when compared to $2.38 billion in December 2023, showed data released by the State Bank of Pakistan (SBP) on Monday.

On a yearly basis, the monthly inflow of remittances registered an increase of 26% as it stood at $1.9 billion in the same month of the previous year, data showed.

Home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing disposable incomes of remittance-dependent households.

However, despite the latest increase in January, workers’ remittances inflow of $15.83 billion was recorded during July-January FY24, reduced by 3% YoY or $386 million, as compared to $16.32 billion registered in 7MFY23.

Breakdown

Overseas Pakistanis in Saudi Arabia maintained their top spot, remitting the largest amount in January 2024 as they sent $587.3 million during the month. The amount improved by 2% on a monthly basis, and was over 43% higher than the $409.4 million sent by the expatriates in the same month of the previous year.

Inflows from the United Arab Emirates (UAE) saw a marginal decline of 3% on a monthly basis, from $419.2 million in December to $407.6 million in January. However, on a yearly basis, the remittances registered a massive increase of nearly 51%, as compared to $269.5 million reported in same month last year.

Remittances from the United Kingdom amounted to $362.1 million during the month, a drop of 2% compared to $368 million in December 2023.

Meanwhile, remittances from the European Union improved 20% year-on-year and 2% on a monthly basis as they amounted to $290.1 million in January 2024.

Overseas Pakistanis in the US sent $283.4 million in January 2024, a year-on-year increase of 32%, compared to $214.4 in same month previous year.

 

[dalit]

This won't make an iota of difference. Even if the remittances doubled. Pakistan needs a massive shovel to attack the debt and invest in the people. Remittances are like a drop of water.

I find it hilarious how Pakistan has been relying on remittances all these years to survive.

 

[ghazi]

[H3]Pakistan's remittances jump to $3bn in March, up 31.3% MoM[/H3]

• On year-on-year basis, inflow increases 16.4%

BR Web Desk
April 8, 2024

Inflow of overseas workers' remittances significantly increased to $3 billion in March 2024, 31.3% higher on a month-on-month (MoM) basis when compared to $2.25 billion in February 2024, showed data released by the State Bank of Pakistan (SBP) on Monday.

On a yearly basis, the monthly inflow of remittances registered an increase of 16.4% as it stood at $2.54 billion in the same month of the previous year, data showed.

Home remittances play a significant role in supporting the country's external account, stimulating Pakistan's economic activity as well as supplementing the disposable incomes of remittance-dependent households.

During first nine months of FY24, workers' remittances recorded an inflow of $21.0 billion, an increase of 0.9% as compared to $20.8 billion remittances recorded during 9MFY23.

Breakdown

Overseas Pakistanis in Saudi Arabia maintained their top spot, remitting the largest amount in March 2024 as they sent $703.1 million during the month. The amount increased by 30% on a monthly basis and 24% YoY.

Inflows from the United Arab Emirates (UAE) saw a jump of 43% on a monthly basis, from $385 million in February to $548 million in March. On a yearly basis, the remittances registered an increase of 34%, as compared to $410 million reported in the same month last year.


Remittances from the United Kingdom amounted to $462 million during March, an increase of 33% as compared to $346 million in February 2024.

Remittances from the European Union surged 19% on a monthly basis and improved 6% year-on-year as they amounted to $315 million in March 2024.

Overseas Pakistanis in the US sent $373 million in March 2024, a year-on-year increase of 18% and 30% MoM.

 

[4MikeEcho]

Credit of course goes to Maryam, Shabaz and fearless generals for mobilzing our masses to send these remittances back to Pakistan. Would have never been possible without the current Govt. With more hardwork and brainwashing, this Govt can double the intake

 

[Ghazi52]

Remittances jump by 44pc in two months​

Shahid Iqbal
September 10, 2024

KARACHI: Overseas Pakistanis sent 44 per cent more remittances in the first two months (July and August) of the current fiscal year (FY25), compared to the same period of the previous fiscal year.

In July, remittances went up by 48 per cent year-on-year, setting a trend of higher inflows. The receipts for July were $2.994 billion, but it dipped to $2.942bn in August.

According to data issued by the State Bank on Monday, the inflows during July-Aug FY25 rose to $5.936bn, while inflows in the same period of previous fiscal year FY24 was $4.123bn — an increase of $1.813bn, or 44 per cent.

The inflows must be a relief for the government at a time when it is struggling to strike a deal with the IMF for $7bn. This inflow would not only improve Pakistan’s image in the eyes of international rating agencies but will also open doors for other sources.

Pakistan is in dire need of dollars for debt servicing of $25bn in FY25.

The country managed to bring down the current account deficit in FY24 to a negligible $665 million while it was just $162m in July FY25. Although the economy suffered due to restricted imports and growth fell to just 2.4 per cent in FY24, the government succeeded in tackling the or current account deficit.

According to financial experts, if remittances keep improving at the same pace, the country would be able to increase its imports to spur growth.

Data showed that inflows from almost all destinations rose during the first two months while the highest increase among important destinations was from the UAE.

Remittances from UAE jumped by 84.3 per cent to $1149m from $624 in the first two months of the previous fiscal year.

However, the highest inflows were from Saudi Arabia, which rose 50.7 per cent. Remittances from Saudi Arabia shot up to $1.473bn during July-Aug FY25, compared to the same period of last year fiscal year.

The other important inflows were $ 918.3m from UK (up by 44.4 per cent); USA $622.4bn (up 23.5 per cent); GCC countries $569.7m (up20.4 per cent) and EU countries $726.6 per cent (up 26.5 per cent). The inflow from EU has exceeded the inflows from the GCC countries.

Currency experts said one of the reasons for higher remittances is the tough stance of the government against illegal currency business. They said the currency smuggling and Hundi and Hawala system are working at the lowest level.

Currency dealers in the open market also reported higher inflows as they have started selling more dollars in the banking market. The inter-bank market is showing stability in the exchange rate — a big attraction for exporters to sell their proceeds while it is also attractive for foreign investors.

Published in Dawn, September 10th, 2024

 

[Ghazi52]

More Pakistani moving out, may be one of the reason for increase.

Top 20 countries losing people to emigration in 2023:

1. Pakistan: -1,620,000
2. Sudan: -1,350,000
3. India: -979,000
4. China: -568,000
5. Bangladesh: -550,000
6. Nepal: -410,000
7. Turkey: -318,000
8. Ukraine: -300,000
9. Brazil: -240,000
10. Philippines: -164,000
11. Greece: -159,000
12. Uganda: -126,000
13. Venezuela: -113,000
14. Mexico: -101,000
15. Zimbabwe: -97,000
16. Azerbaijan: -84,000
17. Vietnam: -82,000
18. Nigeria: -58,000
19. Afghanistan: -49,000
20. Mali: -40,000

According to the UN World Population Prospects.
4:49 AM · Aug 11, 2024