KARACHI: Remittances from Saudi Arabia to Pakistan increased by 74.4 percent in July, compared with the same period last year, the central bank said on Monday, as all inflows from overseas Pakistanis last month hit a record high of $2.8 billion.
Despite the coronavirus pandemic, which was expected to affect money transfers from Pakistanis working abroad, a record high of $23.12 billion was remitted in fiscal year 2019-20, which ended in June. In July, the volume of all remittances increased by 12.2 percent compared with the previous month.
“This is the highest ever level of remittances in a single month in Pakistan,” State Bank of Pakistan said in a statement. The increase is of 36.5 percent compared with the same period last year.
Saudi Arabia remained the source of highest inflows, with $821.6 million in July this year, or 74.45 percent more than in July 2019.
The United Arab Emirates (UAE) contributed $538.2 million, or 26 percent more than in July 2019.
The two Gulf countries are home to over 2 million overseas Pakistani workers.
Other major inflows in July were from the United Kingdom, $393.9 million, and from the United States, $250.6 million.
According to SBP, policy steps under the Pakistan Remittance Initiative have supported the remittance growth. The steps, it said, included reducing the threshold for eligible transactions from $200 to $100, an increased push toward digital channels, and campaigns to promote official channels for transfers.
Experts say a significant factor in the July figures is the suspension in international flights, closed due to the pandemic since March, forcing overseas Pakistanis to send money through official channels instead of carrying it home in person.
“The primary reason behind this massive remittance is that a lot of people travel during the month of Dhu Al-Hijjah to Pakistan to celebrate Eid Al-Adha with their families, so this year due to COVID-19 they avoided to travel and sent money through banking channels,” senior economist Muzzamil Aslam told Arab News.
Officials say the increase in remittances is also thanks to less spending on Hajj pilgrimages because of the coronavirus pandemic.
To streamline remittance inflows, the government is going to launch its first digital banking facility for overseas Pakistanis, Sayed Zulfiqar Bukhari, the prime minister’s special assistant on overseas Pakistanis, told Arab News on Monday.
The initiative, Roshan Digital Accounts, will facilitate overseas Pakistanis in opening local and foreign currency accounts, allowing them to submit all necessary information and documents to SBP online.