KARACHI, Feb 14 (EW): Remittances from Pakistani citizens working abroad fell to a 32-month low of $1.9 billion in January, the central bank data showed on Monday, primarily as a result of an increase in the use of illegal routes by these migrants to send money home.
In January, remittances to Pakistan decreased by 13 percent compared with the same month last year. Remittances dropped by 10 percent from the previous month.
Figures from the State Bank of Pakistan revealed that remittances inflows during January were mainly sourced from Saudi Arabia ($407.6 million), United Arab Emirates ($269.2 million), the United Kingdom ($330.4 million), and the United States of America ($213.9 million).
During the first seven months of the current fiscal year, the country received $16 billion in remittances, which is an 11 percent decrease from the same period last year.
According to analysts, the growth in remittances was slowed down by the usage of hawala and hundi, which offered better rates than the official rates. However, following the removal of currency controls later last month, the spread between the interbank, open, and grey markets has narrowed, which will encourage Pakistani expats to transfer money home through authorised channels.
The rupee has lost around 17 percent of its value against the dollar since January 25. “Black market impacted the remittances flow in January but still not a bad number, given the huge gap between official and black market rate,” said Fahad Rauf, the head of research at Ismail Iqbal Securities. He expects an improvement in remittance flows beginning in February. This is due to Ramazan, which will begin next month.
