Pakistan's foreign remittances fall in November, exchange rate against US dollar declines
In Pakistan the exchange rate witnessed a persistent decline against the US dollar for the last several months because of the fall in foreign remittances by 6.6 percent despite contradicting claims by Pakistan economic managers.
Despite claims by Pakistan's economic managers that the exchange rate would move in two ways, the rupee is persistently on the decline against the dollar. The rupee got depreciated from Rs152 against a dollar to Rs180 in the last few months, according to News International.
Earlier, Pakistan had fetched remittances to the tune of USD 29.4 billion in the fiscal year 2020-21 against USD 23.3 billion in previous fiscal 2019-20, indicating that the county got additional remittances of around USD 6 billion in the wake of COVID-19 pandemic.
But if the remittances dropped significantly mainly because of the widening gap between the interbank rate and open market rate, then the incentives for Hundi/Hawala might increase manifold, according to News International.
Further, the increased remittances that had peaked to over USD 29 billion in the last fiscal year had rescued Pakistan from plunging into a Balance of Payment (BoP) crisis in a big way.
Meanwhile, these remittances witnessed a massive surge in the aftermath of Covid-19 pandemic when there were restrictions on traveling abroad.
Therefore, overseas Pakistanis, especially those living in Europe, sent back their savings and rescued the country from facing any serious crisis, according to News International.
Earlier, Pakistan's remittances fell by 6.6 percent in November 2021 but they grew by almost 10 percent in the first five-month (July-Nov) period of the current fiscal year.
During the July-November period of 2021-22, the remittances went up by 9.7pc to USD 12.9 bn against USD 11.7 bn in the same period of FY21.
The remittances from European countries rose sharply to 41 percent to USD 1.442 bn in five months of FY22 against USD 1.02 bn in the same period of the last fiscal year, according to News International .