{"id":13368,"date":"2023-01-13T14:22:48","date_gmt":"2023-01-13T14:22:48","guid":{"rendered":"https:\/\/dailyausaf.com\/en\/?p=13368"},"modified":"2023-01-13T14:23:35","modified_gmt":"2023-01-13T14:23:35","slug":"illegal-channels-pakistans-remittances-fall-19-to-2bn-in-dec","status":"publish","type":"post","link":"https:\/\/dailyausaf.com\/en\/business\/illegal-channels-pakistans-remittances-fall-19-to-2bn-in-dec\/","title":{"rendered":"Illegal channels: Pakistan’s remittances fall 19% to $2bn in Dec"},"content":{"rendered":"

Illegal channels: Pakistan’s remittances fall 19% to $2bn in Dec. Overseas workers’ remittances flowing into Pakistan dropped 19% in December to $2 billion from $2.52 billion recorded in the same month 2021, the central bank said on Friday, mainly owing to mushrooming of the grey transactions.<\/p>\n

The remittances received during the July-December period of FY23 fell 11% to $14.052 billion from $15.807 billion in the first half of FY22, the State Bank of Pakistan<\/a> (SBP) said.<\/p>\n

Month-on-month, the inflows sent home by the Pakistani diaspora working abroad decreased by 3.2% to $ 2.108 billion in November 2022.<\/p>\n

Arif Habib Limited (AHL), in a recent note, said a key risk that had emerged in the current account in recent months was the deteriorating trend in remittances.<\/p>\n

Read more:\u00a0FBR assessment reveals 90% of dollars in Pakistan being hoarded<\/a><\/strong><\/em><\/p>\n

The brokerage said that a sizeable gap (10-12%) between the official and unofficial exchange rates amid administrative measures undertaken by the SBP was the major reason for the declining official remittances trend, with rising flows via unofficial channels.<\/p>\n

“We believe such a large gap between the two rates is unsustainable and counterproductive to the successful negotiations on the 9th review, which is a likely catalyst for things to normalize in the exchange markets.”<\/p>\n

The AHL report added that this trend was also evident from the sharp decline in official remittances. “We estimate, the country losing around USD 150-200mn monthly flows due to the artificial gap in official and unofficial rates,” the brokerage said.<\/p>\n

Remittances from Saudi Arabia, despite being the largest contributor, fell 18% to $516.3 million in December 2022 compared to $626.8 million sent in the same month of the previous year.<\/p>\n

Inflows from the United Arab Emirates (UAE) declined 27% to $328.7 million from $453.2 million in December 2021, according to the central bank.<\/p>\n

Pakistan\u2019s central bank forex reserves have plunged to the lowest level since February 2014 after a decline of 22.11%, posing a serious challenge for the country in financing imports.<\/p>\n

The announcement came at a time when the country is in dire need of foreign aid to reduce its current account deficit as well as ensure enough reserves to meet its debt obligations.<\/p>\n

Coupled with another $5.8 billion held by commercial banks, the nation has $10.2 billion in reserves \u2014 which barely covers three weeks of imports.<\/p>\n

During the week ended on January 6, the central bank’s forex reserves fell $1,233 million, or 22.12% to $4,343.2 million, a statement from the central bank said, down from last week’s reserves of $5,576.5 million.<\/p>\n

Pakistan’s economy has crumbled alongside a simmering political crisis, with the rupee plummeting and inflation at decades-high levels, but devastating floods and a global energy crisis have worsened the situation.<\/p>\n

Despite recent compression measures by the government, Pakistan’s import bill for goods was $5.1 billion per month in both November and December, according to the country’s statistics bureau. Its main imports are critical energy-related fuels.<\/p>\n","protected":false},"excerpt":{"rendered":"

Illegal channels: Pakistan’s remittances fall 19% to $2bn in Dec. Overseas workers’ remittances flowing into Pakistan dropped 19% in December to $2 billion from $2.52 billion recorded in the same month 2021, the central bank said on Friday, mainly owing to mushrooming of the grey transactions. The remittances received during the July-December period of FY23 […]<\/p>\n","protected":false},"author":8,"featured_media":13369,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[443,572,138],"class_list":["post-13368","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-dollar","tag-sbp","tag-pakistan"],"_links":{"self":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/13368","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/comments?post=13368"}],"version-history":[{"count":0,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/posts\/13368\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media\/13369"}],"wp:attachment":[{"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/media?parent=13368"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/categories?post=13368"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dailyausaf.com\/en\/wp-json\/wp\/v2\/tags?post=13368"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}