Workers' remittances reach above $2bn in May

June 10, 2021 (MLN): Workers' remittances extended their record run of above $2 billion in May 2021. At $2.5bn, they were up 34% from a year ago. These were also higher than the monthly average of $2.4 billion during July-April FY21.

Making an announcement on its Twitter handle, the State bank of Pakistan (SBP) said that the usual post-Eid monthly dip was also much smaller this year.

On a sequential basis, remittances sent by Overseas Pakistani fell by 10.4% in May 2021 compared to April 2021. This fall was expected as remittances usually slow in the post-Eid-ul-Fitr period. As Eid fell in mid-May 2021 with markets closed a week earlier, there was some front-loading of remittances in April 2021. However, the seasonal decline in May 2021 was less than half the average decline observed during FY2016-2019.

In FY2020, remittances experienced an exceptional rise due to the easing of Covid lockdowns in the post-Eid period in Gulf countries.

According to data released by SBP, the total amount remitted during July-May FY21 was $26.7365 billion compared to $20.6590 billion from the corresponding period of FY20 which showed an increase of $6,077.41 million or 29.42%. Remittances during the first eleven months of FY21 have already crossed the full FY20 level by $3.6 billion.

Meanwhile, remittance inflows during July-May FY21 were mainly sourced from Saudi Arabia ($7.0 billion), United Arab Emirates ($5.6 billion), United Kingdom ($3.7 billion) and the United States ($2.5 billion).

"Record-high inflows of workers’ remittances during FY21 have been driven by proactive policy measures by the Government and SBP to incentivize the use of formal channels, curtailed cross-border travel in the face of COVID-19, altruistic transfers to Pakistan amid the pandemic, and orderly foreign exchange market conditions," said SBP in a press release.

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