Remittances rise over 22 per cent in Sept

[LahoreEstate]

KARACHI: Overseas Pakistanis emerged as the real saviour for the economy, which faced serious imbalances on external front, as they remitted record $806.12 million in September 2009, registering an increase of 22 per cent over the same month last year.

The State Bank of Pakistan on Saturday reported that the country received a total of $2.332 billion remittances during the first quarter (July-September) of 2009-10, which was 24 per cent higher over the same period last year.

This was the third consecutive month of record remittances. The previous highest single month record was of $780.53 million in August 2009.

The amount remitted in September 2009 also included $0.08 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

A couple of months back the government and the State Bank had launched an initiative to boost remittances.

This move has started bearing fruits by further boosting the already trend of higher remittances. The rising remittances were now playing vital role in the economic stability of the country.

Last year the country received $7.8 billion remittances while its total current account deficit was $8.8 billion.

If the flow of remittances continues rising with the same pace the country could get around $9 billion by end of the current fiscal year, while the government believes that remittances could reach $12 billion by end of 2010-11.

The ever rising looming threat of current account imbalances have been forcing the government to borrow from the international donors and accept harsh conditions that hurt the overall economic growth.

The rising remittances also help the country to build reserves of over $14 billion. The government was able to add its borrowed dollars into its reserves mainly because of the high inflows of remittances.
The reserves boosted in just 8 months after getting disbursement from the International Monetary Fund (IMF). The government signed an agreement for $7.6 billion standby facility which was further enhanced to $11.3 billion.

Analysts believe the country would be able to increase its reserves on the back of rising remittances. They said it was a good sign that Pakistanis have shown their faith in banking system despite the disaster of banking system at international level.

The inflow of remittances in the July-September quarter from the UAE, USA, Saudi Arabia, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $504.01 million, $498.76 million, $430.75 million, $323.87 million, $235.08 million and $78.27 million respectively.

http://www.dawn.com/wps/wcm/connect/dawn...pt--il--08