Remittances from overseas Pakistanis maintained the support, exceeding $2 billion for the eighth consecutive month, and amounted to $2.3 billion in January 2021, up by 19 percent over January 2020. However, remittances remained slightly lower from the December 2020 level of $2.4 billion.
On a cumulative basis, workers’ remittances reached $16.5 billion during July-Jan FY21, registering a 24 percent increase over the same period last year.
A large part of workers’ remittances during July-Jan FY21 was sourced from Saudi Arabia ($4.5 billion), United Arab Emirates ($3.4 billion), United Kingdom ($2.2 billion), and United States ($1.4 billion).
A.A.H Soomro, Managing Director at Khadim Ali Shah Bukhari Securities, while commenting on the remittances, said,
“Pakistan continues to enjoy benefits of lower travel, formal channels Roshan Accounts, rising asset values and Economic/Currency stability. This is a super healthy trend that needs to be continued. Keep the reserves up and do not squander the war chest.”
This sustained increase in workers’ remittances largely reflects the growing use of banking channels that is attributed to continuous efforts by the Government and SBP to attract inflows through the official channels, limited cross-border travel amid the second wave of COVID-19, and flexible exchange rate regime, SBP commented.
The country continues to enjoy the benefits of the increasing use of formal channels, Roshan Digital Accounts rising asset values, and currency stability.
The healthy inflows of remittances have played pivotal support towards the sustainability of the current account, which remained in surplus for the past six months.
Prime Minister Imran Khan also highlighted the development while congratulating the Overseas Pakistani community on the achievement.
According to Topline Securities, a decade ago, Pakistan was earning on average 86% of what Bangladesh used to earn in remittances. In the last 8 years, Pakistan’s remittances have surpassed Bangladesh by an average of 28%.