Remittances up 12.56 percent to $9.02bln in July-November

KARACHI: Overseas Pakistanis sent $9.028 billion in remittances to the country during the first five months of the current fiscal year of 2018/19, up around 13 percent over the corresponding period a year earlier, continuing to give relief to ailing balance of payment position afflicted by swelling import and debt payments.

Remittances to Pakistan amounted to $8.021 billion in the July-November period of the last fiscal year, the State Bank of Pakistan’s (SBP) data showed on Monday. Inflows from the United States showed highest growth of 33.19 percent to $1.393 billion in the July-November period.

In November, remittances amounted to $1.608 billion, which was 19.58 percent higher than October and up 2.02 percent over the corresponding month a year earlier.

The SBP earlier said remittances were providing much-needed sustenance to current account whose deficit caused local currency to plunge to one of the lowest levels.

“A continued increase in exports and workers’ remittances narrowed the external current account deficit from $5.1 billion in Jul-Oct FY18 to $4.8 billion in Jul-Oct FY19, a net improvement of 4.6 percent,” the SBP said in a latest monetary policy announcement that raised interest rate by 150 basis points to 10 percent – four-year high – as rupee continued to fall.

The rupee has lost a quarter of its value against the US dollar since December last year and came down to the level barely enough to meet import requirements of two months.

SBP’s net liquid foreign exchange reserves remained under pressure despite improvement in exports and remittances, falling to $7.502 billion as of November 30 from $9.8 billion at the end of FY2018. “Going forward, there is an expectation of receiving higher foreign inflows from both private and official sources during the second half of FY19,” the SBP said in the statement. “Furthermore, recent bilateral arrangements including the deferred oil payments facility would also be available to the market from January 2019 onwards.”

The central bank further said the projected decrease in the current account deficit that could be further supported by the recent decline in international oil prices would instill confidence in the foreign exchange market. SBP data showed that the United Kingdom followed the US in terms of remittances, with $1.286 billion in the July-November period compared with $1.127 billion in the corresponding period last year.

Remittances from Saudi Arabia depicted some improvement during the period under review. Remittances sent home by workers living in Saudi Arabia increased 2.58 percent to $2.152 billion in the first five-month period.

Remittances from UAE rose 10.60 percent to $1.950 billion during the period under review. Remittances from other gulf cooperation council countries declined 6.78 percent to $876.11 million, according to the SBP’s data.