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Boost in Remittances During Pandemic: State Bank of Pakistan

by Newsweek Pakistan

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Central bank says overseas Pakistanis sent $23.12 billion home in fiscal year 2019-20

Foreign remittances from overseas Pakistanis increased by nearly 8 percent during the first four months of the coronavirus pandemic, the State Bank of Pakistan revealed in a statement on Monday.

Comparing the remittances sent in the months of March, April, May and June in 2019 and 2020, the central bank said that there had been a jump of 7.8 percent, while June 2020 had seen a 50 percent boost from June 2019—going from $1.64 billion to $2.47 billion.

The State Bank of Pakistan statement said that during June 2020, Pakistanis in Saudi Arabia had remitted $610 million; those in the U.S. $450 million; from the U.K. $400 million; and $430 million were sent back by Pakistanis living in the United Arab Emirates. These numbers translate to increases of 42 percent, 7 percent, 41 percent and 34 percent, respectively.

In its statement, the central bank claimed that countries easing lockdowns in June was one of the reasons for the rise in remittances. It said that this allowed overseas Pakistanis to “to transfer accumulative funds, which they were unable to send earlier.” It claimed that it was also likely that “they sent remittances to support extended families and friends due to COVID-19.”

The State Bank said that the government’s policies, such as reducing the threshold of reimbursement Telegraphic Transfer charges from $200 to $100, coupled with “broadening the scope of incentive scheme for marketing scheme for financial institutions” had increased incentives for overseas Pakistanis to send remittances through regular channels instead of availing the informal economy, further boosting remittances.

Overall, overseas Pakistanis sent remittances of $23.12 billion in fiscal year 2019-20, an increase of 6.4 percent over fiscal 2018-19.

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