Pakistan’s remittance inflows registered a hike of 27 percent year-over-year as banking services in the country improve accessibility and ease-of-use for overseas Pakistanis.
Remittances sent by overseas Pakistanis advanced to $2.66 billion in August 2021, according to data released by the State Bank of Pakistan (SBP).
However, the inflows in August 2021 came in slightly less than the total of $2.71 billion recorded last month.
On a cumulative basis, the remittances grew by 10.4 percent between July 2021 and August 21 as compared to the same period last year.
The countries that contributed the most to the remittance inflows during August 2021 were Saudi Arabia ($694 million), the United Arab Emirates ($512 million), the United Kingdom ($353 million), and the United States of America ($279 million).
The Managing Director at Khadim Ali Shah Bukhari Securities, A. A. H Soomro, told ProPakistani that the remittance numbers were “pleasantly surprising” at a time when investors are worried about the country’s expanding trade deficit. He remarked that “continuity will be the key” as the SBP announces incentives to encourage remittance growth.
“So far, in last two years, remittances growth have kept the growth hopes alive,” Soomro said, and added, “otherwise, exports growth is far from the needed levels”.
The government has introduced a number of incentives and facilities since the onset of the COVID-19 pandemic to encourage the growth of remittances.
The Economic Coordination Com¬mi¬t¬tee (ECC) recently approved the National Remittance Loyalty Program (NRLP) — an initiative that seeks to incentivize overseas Pakistanis to send remittances through official banking channels. Due to take effect on 1 October, the program will use a points-based system to reward participants with cash in exchange for the remittances that they submit.
The SBP is planning to launch a mobile application to act as a user-friendly platform for NRLP participants.
The government also introduced the Roshan Digital Account (RDA) program in September 2020 — a banking facility for overseas Pakistanis that allows them online, digital access to banking services in the country. Foreign exchange inflows through the RDAs were recorded at a total of $2.11 billion at the end of August.
The strength in the remittances is a welcome development amid Pakistan’s rising imports, widening current account deficit, and currency devaluation.
The imports in August grew by 89.9 percent year-over-year to $6.31 billion in August 2021, while the current account balance swung to a deficit of $773 in July 2021 from a surplus of $583.
Earlier this week, the Pakistani Rupee depreciated to its lowest against the US Dollar since August 2020 as imports continue to rise and political instability in Afghanistan persists.
Source: Pro Pakistani