Remittances during the month of October rose 14.1 per cent year-on-year to $2.3 billion, clocking in above the $2bn mark for the fifth consecutive month, data released by the State Bank of Pakistan showed on Thursday.
“Workers’ remittances remained above $2 billion for the fifth consecutive month in October 2020. Workers’ remittances amounted to $2.3 billion during October 2020, increasing by 14.1pc compared to October 2019,” said the central bank in a press release.
During the first quarter of fiscal year 2021 (Jul-Oct), workers’ remittances clocked in at $9.4bn, recording a growth of 26.5pc over the same period last year.
The SBP said improvements in Pakistan’s forex market structure and its dynamics, efforts under the Pakistan Remittances Initiative (PRI) to formalise the flows and limited cross-border travelling contributed to the growth in remittances.
“These numbers were expected. The whole South Asia region is getting above-average inward remittances due to lockdown and reduction in flights and movement of unofficial funds,” said Muhammad Sohail of Topline Securities.
“In the short-run, this [the increase in remittances] will support local currency,” he added.
Earlier, a World Bank report projected that remittances to Pakistan will grow at about 9pc in 2020, totalling about $24bn. The World Bank attributed this increase to diversion of remittances from informal to formal channels due to the difficulty of carrying money by hand under travel restrictions.
Country-wise, the SBP data showed that a major chunk of monthly inflows came from Saudi Arabia at $634.8 million, followed by UAE at $504.1m and UK at $278.5m.