Remittances for the second month of the current fiscal year 2022, August 2021 were recorded at the US $2.66 billion, the recently released State Bank of Pakistan (SBP) data showed.
According to the data, on a month-on-month basis, compared to July 2021, the remittances did not witness much change, coming down only 1.8 per cent in August from $2.71 billion. However, on a year-on-year basis, the remittances increased 26.8 per cent, up from $2.10 billion in August 2020.
Remittances rose to $2.7bn in Aug 21, up 27% from Aug 20 and broadly unchanged from last month. Cumulatively during Jul-Aug 21, remittances have grown by 10.4% compared to the same period last year.https://t.co/7XBd4uNES4 pic.twitter.com/u6pKzrE0Q1
— SBP (@StateBank_Pak) September 10, 2021
For the two months of FY22, the cumulative remittances made up $5.36 billion compared to the same months in the FY21, where the remittances recorded were $4.86 billion. This is an increase of 10.4 per cent YoY.
The highest cash inflow for August came from the Middle East, with the highest inflows of $694.2 million from the Kingdom of Saudi Arabia, followed by the United Arab Emirates with $512.3 million in cash inflows.
The third highest remitter location was the UK, with $352.8 million in inflows. The EU countries overall made up $291.8 million in remittances, with Italy making up for the largest remitter in the region.
Other Gulf Cooperation Council (GCC) countries made up for $289.2 million worth of remittances for the month of August.
It is worth mentioning that the remittances have risen in FY21, as the 12MFY21 made up for $29.4 billion in remittances compared to $23.1 billion in 12MFY20, showing an increase of 26.97 per cent YoY.
Special Assistant to Prime Minister for Overseas Pakistanis & Human Resource Development Zulfikar Bukhari took to Twitter to comment on this. He compared the situation three years ago when Imran Khan’s government came to power to today. He said, “In August 2018, Pakistan was headed towards default from years of corruption & mismanagement.”
He added, “In August 2021, Pakistan has record remittances, $2+Bn for 15th consecutive month & looks to cross $31Bn in the FY.”
Aug2018: Pakistan was headed towards default from yrs of corruption & mismanagement.
Aug2021: Pakistan has record remittances,$2+Bn for 15th consecutive month & looks to cross $31Bn in the FY.#OverseasPakistanis have made clear where they put their trust https://t.co/UqHMpw7Ti3
— Sayed Z Bukhari (@sayedzbukhari) September 10, 2021
The State Bank of Pakistan’s foreign exchange reserves have fallen 0.61 per cent on a weekly basis, down from $20.146 billion to $20.023 billion.
According to reports, this came on the back of external debt payment by the government. On September 3, the foreign currency reserves held by the SBP were recorded at $20,022.6 million, down $123 million compared with $20,145.6 million recorded on August 27, State Bank Data showed.
The International Monetary Fund’s (IMF) largest-ever allocation of $650 billion in Special Drawing Rights (SDR) for developing countries came into effect on 23rd August, bringing about $2.751 billion of additional funding for Pakistan as well. This took SBP reserves to a historic high level of $20.4 billion.
Before that on March 30, 2021, Pakistan borrowed $2.5 billion through Eurobonds by offering lucrative interest rates to lenders aimed at building foreign exchange reserves.
It is worth mentioning that the multilateral borrowing in December 2020 had led to the foreign exchange reserves of SBP passing the $10 billion mark.