- SBP says inward remittances stood at $8.8 billion in July-October.
- Remittances increased by 9.6% on a year-on-year basis.
- Analysts attribute the rise to the crackdown on hundi/hawala.
KARACHI: Remittances sent by foreign workers were recorded at $2.5 billion in the month of October, registering an increase of 11.5% on a month-on-month basis, the State Bank of Pakistan (SBP) said in a statement on Friday.
“In terms of growth, through October 2023, remittances grew by 11.5% month-on-month and 9.6% year-on-year,” the central bank said.
The central bank also shared that inward remittances in the first four months of the current fiscal year stood at $8.8 billion.
According to the SBP, out of the $2.5 billion, Pakistani workers from Saudi Arabia sent $616.8 million, the United Arab Emirates was second with $473.9 million, remittances from the United Kingdom recorded $330.2 million and those from the United States recorded $283.3. Millions of dollars were sent.
Dr. Khaqan Najib, a former economic adviser to the Finance Ministry, attributed the increase in remittances to the locking of exchange rates between the open and interbank markets and curbing illicit exchange.
“The exchange rate swap between the open market and the interbank has helped remittance flows through the formal sector, causing remittances in October to increase by nearly $300 million compared to the previous month,” Dr Najib said.
The economist says recent “enforcement measures” taken by the government against the illegal exchange market have helped reduce smuggling demand for dollarization and control hundi/hawala.
“This has helped streamline remittances through interbank,” Dr Najib said. He said the increase in remittances from the Middle East is an indicator that Hundi/Hawala is declining as the percentage of Hundi/Hawala turnover is higher in these countries.
“This is overall contributing to the improvement in remittances in October,” the economist said.