Remittances rose to $2.77 billion in July, which is the highest ever level of remittances in a single month in Pakistan, according to data released by the State Bank of Pakistan (SBP) on Monday.
That represents a year-on-year growth of 36.5pc when compared with July 2019, and 12.2pc when compared to June 2020. Last month, remittances were recorded at $2.47 billion, which the SBP had dubbed as ‘historic’ at the time.
Most of the remittances in July were received from Saudi Arabia, at $821.6 million; followed by UAE, at $538.2 million; UK, at $393.9 million; and the US, at $250.6 million.
The central bank also noted that the growth rate in remittances compared to the same month in the previous year is around twice as high as the Eid-ul-Adha related seasonality typically experienced over the last decade.
“Given the impact of COVID-19 globally, this increase in worker’s remittances is encouraging,” the SBP said.
Overall, there are two main factors that explain the rise in remittances, along with some minor reasons.
The first is that it seems the use of official channels to send remittances has increased, and there has been a decline in traditional hawala and hundi methods of sending cash home.