Saudi Arabia, UAE remain top contributors to Pakistan’s remittances

Overall, overseas Pakistani workers remitted $21.84 billion during FY19, showing a growth of 9.68 percent compared with $19.91 billion received during the same period last year, the State Bank of Pakistan said on Wednesday. (Shutterstock)
Updated 11 July 2019
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Saudi Arabia, UAE remain top contributors to Pakistan’s remittances

  • The two countries made up 44% of inflows in fiscal year 2018-19
  • Pakistani workers remitted total of $21.84 billion, up 9.6% from last fiscal year

KARACHI: Saudi Arabia, the United Arab Emirates and other Gulf Cooperation Council countries remained key contributors to Pakistan’s remittance inflows for fiscal year 2018-19 (FY19), collectively sending 53.7 percent or $11.74 billion, the central bank has said. 
Overall, overseas Pakistani workers remitted $21.84 billion during FY19, showing a growth of 9.68 percent compared with $19.91 billion received during the same period last year, the State Bank of Pakistan said on Wednesday.
Experts say the devaluation of the rupee and the rise of oil prices in the Middle East are the key reasons for the growth in remittances.
“The dollar rate against the rupee is higher which means Pakistani workers’ families at home receive larger amounts. Also, inflows from legal channels has increased because banks have incentivized,” said Khurram Schehzad, a senior financial analyst and CEO of Alpha Beta Core — a financial advisory firm.
He added: “Our remittances growth mainly comes from the UAE and Saudi Arabia; the inflows from west are minimal.”
In FY19, Pakistani workers in Saudi Arabia remitted $5 billion, 3 percent higher than last year’s $4.8 billion while inflows from the UAE were $4.6 billion, or 6 percent higher than $4.3 billion last year. Collectively, workers from the Kingdom, the UAE and other GCC countries contributed $11.74 billion to remittances in FY19 as compared to $11.38 in FY18.
Saudi Arabia and the UAE remained traditional markets for Pakistani manpower, with emigration patterns for 2018 showing the UAE as the largest destination country for Pakistani emigrants with 54 percent of emigrants, followed by 26.39 percent to Saudi Arabia, 7.11 percent to Oman, and 5.49 percent to Qatar, according to Pakistan’s Bureau of Emigration and Overseas Employment (BEOE).
Pakistani officials say the country is facilitating its workers abroad as they play a vital role in the economy, having helped to reduce pressure on external accounts during the outgoing year.
“We are facilitating Pakistani workers with legal aid through our lawyers and our labor attachés help them in resolving the issues with their Kafeel (sponsors),” said Sheikh Fayyaz Ud Din, Chairman of the National Assembly’s standing committee on overseas Pakistanis. “We also make arrangements in the case of the death of a worker to bring back the body.”
In Saudi Arabia during 2018, the majority of the emigrants came from Bangladesh (257,313) followed by Pakistan (100,910) and India (72,399), BEOE data shows.


No change in instructions on purchase of foreign currency by banks, clarifies central bank

Updated 22 July 2019
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No change in instructions on purchase of foreign currency by banks, clarifies central bank

  • Some media outlets misinterpreted the updated version of Foreign Exchange Manual, causing confusion
  • Commercial banks cannot replace exchange companies, says Malik Bostan

KARACHI: Pakistan’s exchange companies would continue to play their role in the country’s economy, clarified the State Bank of Pakistan on Monday, noting that there was no change in the instruction on purchase of foreign currency notes by banks who were already allowed to deal in international currencies through authorized branches.
The confusion was caused when some local and foreign media outlets misinterpreted the updated version of the central bank’s instructions in its Foreign Exchange Manual, thinking that the country’s currency exchange companies were being drive out of business and commercial banks were going to assume their role. 
“SBP is in process of revision of Foreign Exchange (FE) Manual in phased manner. In this respect, seven chapters (1, 2, 3, 4, 5, 7 & 20) of FE Manual have been revised and circulated through FE Circular dated November 29, 2018, in the first phase. In phase II, three chapters 8, 9 & 11 have been revised through FE Circular No. 03 of 2019 dated July 16, 2019,” a statement issued by the central bank said. 
One of these revised chapters, 11, includes regulations on “Dealings in Foreign Currency Notes and Coins etc. by the Authorized Dealers (banks).”
“With respect to revised Chapter 11, it has come to our notice that there are some confusions/misinterpretations regarding Para 2 suggesting that SBP has allowed the banks to sell/purchase foreign currencies to/from public by amending the existing regulations,” the SBP said while clarifying that no such amendment had been made.
Currency dealers also said they were playing a vital role for the country’s economy "that cannot be downplayed."
“Banks were already authorized to undertake foreign exchange currency business through authorized branches, but they did not take interest in currency dealing which is evident from the fact that only a few of them established such branches,” Malik Bostan, president of the Forex Association of Pakistan, told Arab News on Monday.
Bostan added that “we are operating on meager profit that commercial banks can’t afford to make.”