By Muhammad Soban

ISLAMABAD, Oct 13 (INP-WealthPK): Remittances from overseas Pakistanis decreased by 10.5% in September 2022 compared to August, settling at $2.4 billion, according to the State Bank of Pakistan (SBP).

Pakistan is heavily dependent on workers remittances to meet the requirement of foreign reserves. Remittances help Pakistan's economy to narrow the current account deficit. In September, remittances showed a decrease of 12.3% on a year-over-year (YoY) basis due to high base effects.

According to the central bank, remittances decreased by 6.3% to $7.7 billion between July-September from $8.19 billion in the same period of last year. According to currency dealers, the drop in remittances in September was due to the difference between official and illegal dollar rates.

According to data, in September 2022, Pakistan received $616.6 million from its largest destination of workers, Saudi Arabia, a decline of 10.8% from $691.8 million in August.

The United Arab Emirates is the second largest destination of Pakistani workers who sent $474.3 million to their homeland in September, a decline of 10.7% from $531.4 million in August, as shown in the following graph.

Pakistan’s remittances from the US and UK also fell in September by 8.93 and 16.74%, respectively. Expats from the US sent $268.1 million in September compared to $294.4 million in August. The workers settled in the UK transferred remittances worth $307.8 million compared to $369.7 million in August.

Moreover, as the above graph shows, remittances sent from the European Union countries fell by 5.53% to $259.6 million in September as against $274.8 million in August.

According to Tahir Abbas, Head of Research at Arif Habib Limited (AHL), remittances are declining in line with the trend. He said that based on the current growth rate, remittance inflows are expected to remain steady in FY23 or decline by 1.5-2%.

According to the analyst, remittances are expected to improve in October. Hawala and hundi are also present, but he said the government's recent measures are likely to improve the remittance figure in October.

Credit : Independent News Pakistan-WealthPk