Overseas Pakistanis’ remittances decreased to $2.1 billion in November 2022 as the country’s currency crunch accelerated the use of unofficial channels like hundi and hawala.
According to data provided by the State Bank of Pakistan (SBP), receipts decreased by 4.8 percent in November 2022, compared to inflows of $2.21 billion in the month before.
The settlements were 14.3% lower contrasted with that very month of the earlier year when they remained at $2.45 billion.
According to financial pundits, non-resident Pakistanis may have chosen to send remittances through the open market and unofficial channels like Hundi and Hawala due to the significantly higher exchange rate.
As a result, there was a setback in the flow of money through official channels. For the majority of the month, the rate offered by banks was higher than the price of the US dollar in the open and black markets by Rs10-12.
During Nov 2022, workers’ remittances recorded an inflow of US$2.1 billion. For detail see https://t.co/rPOvn9CTjfhttps://t.co/7XBd4uNES4 pic.twitter.com/A1jhKGHQ7Y
— SBP (@StateBank_Pak) December 14, 2022
According to the central bank, remittances decreased by 9.6% compared to the same time last year, with a cumulative inflow of $12 billion in FY23.
In spite of the rupee fluctuating between 220-224 in the interbank market last month, the open market experienced a shortage of dollars and even other currencies.
In the midst of the continuous money vacillations in desperate Pakistan, a bootleg market for dollars has jumped up in Pakistan after the SBP confined admittance to unfamiliar cash to protect draining stores — which plunged to a four-year low of $6.7 billion, Bloomberg revealed.
Despite the current exchange rates displayed outside the money-changing businesses, which claim to have no dollars, it was discovered that customers could still purchase the dollar on the black market at a rate approximately 10% higher than the one offered in the regular one.
Country-specific data
In November 2022, Pakistanis living in Saudi Arabia sent the most money, $498 million. However, compared to the $570.5 million received in October 2022, it was 12.7% lower.
Receivings decreased from $427 million to $377.8 million as expatriates in the UAE sent home 11.5 percent less money.
The UK saw a decrease of 7.28 percent in Pakistani remittances, reaching $299.1 million. In October, they sent $278.8 million.
In addition, remittances from other Gulf Cooperation Council (GCC) nations decreased slightly by 0.3 percent to $257.5 million, and remittances from European nations decreased by 5.45 percent to $245.4 million in the month under review, compared to October.
