Pakistan: Remittances touch four-month low figure in September

The State Bank of Pakistan (SBP) reported on Tuesday that the receipts contracted 10.5% in September 2022 compared to inflows of $2.72 billion in the prior month. The remittances were 12.3% lower compared to the same month of previous year when they stood at $2.78 billion, reports The Express Tribune.

Experts, while citing SBP Governor Jameel Ahmed, told the newspaper that a section of non-resident Pakistanis had apparently opted to send remittances through the open market and unofficial channels (like Hundi and Hawala), as they offered a much higher exchange rate in September this year.

As a result, the inflows through official channels faced a setback. The price of the US dollar was higher by Rs10-12 in the open and black markets compared to the rate offered by banks for most of the days in the month. With the cumulative inflow of $7.7 billion in July-September FY23, the remittances decreased by 6.3% as compared to the same period of last year, the central bank said.

“Workers’ remittances at around $2.5 billion in a month are not bad. Rather, it is a good number,” Ismail Iqbal Securities Head of Research Fahad Rauf said while talking to The Express Tribune.

“The number seems to be small as we are comparing it with a relatively bigger number in the previous month.” Citing Monday’s analyst briefing given by the SBP governor on the latest monetary policy statement (MPS), Rauf said Jameel Ahmed attributed the drop in workers’ remittances to the shift of a section of overseas Pakistanis to unofficial channels due to availability of a higher rupee-dollar price there.