KARACHI: Pakistan expects to receive record remittances mainly from Saudi Arabia and the United Arab Emirates (UAE) ahead of Eid festivities, currency traders and analysts said on Friday, and added that monthly inflows could reach a record high of over $3 billion.

According to the State Bank of Pakistan, the country witnessed a 43 percent increase in workers’ remittances in March 2021 when it received $2.7 billion. It was the 10th consecutive month the Pakistani diaspora sent more than $2 billion to their homeland.

“Keeping in view the consistent inflows, we expect remittances to cross the $3 billion mark ahead of Eid,” Malik Bostan, chairman of the Exchange Companies Association of Pakistan (ECAP), told Arab News on Friday.

“The major support as usual is coming from Saudi Arabia and the UAE where large numbers of Pakistani workers reside, and many of them are unable to travel to their country to celebrate Eid with their families,” he continued. 

“We expect 20 to 30 percent seasonal growth in remittances.”

During the current fiscal year, Saudi Arabia remained the single biggest contributor to workers’ remittances by sending in $690.4 million in March. The overall inflow from the kingdom during the fiscal year amounted to $5.7 billion followed by the UAE with $4.5 billion.

“Pakistan is receiving great support from Saudi Arabia and the UAE,” Bostan said. “This is likely to continue because overseas Pakistanis living in the Gulf region generously send zakat and other donations ahead of Eid festivities.”

The country has cumulatively received $21.5 billion in remittances during July-March FY21 which is 26 percent higher than the number in the corresponding period of FY20.

Analysts maintained that travel restrictions coupled with technological upgradations were playing a major role in the growth of remittances through official channels. 

“Now people are utilizing different payment transfer technology apps which are economical and much faster,” Samiullah Tariq, head of research at Pakistan-Kuwait Investment (PKI), told Arab News.

“Previously, many people were reluctant to use these apps, but they have now discovered their benefits which has also resulted in the growth in remittances,” he added.

However, some experts said they did not expect any major increase in the remittance inflows ahead of Eid, though they agreed that the ongoing trend was likely to continue.

“Let’s not expect anything special in Ramadan,” Muzzamil Aslam, a senior economist, told Arab News. “The remittances are likely to follow the same trend and be somewhere between $2.5 billion to $2.7 billion.”

Aslam believed that the only factor that could boost the remittances was the recent appreciation of the Pak rupee.

“If people have to send, for instance, Rs100,000 to Pakistan, they will need to transfer more dirhams or riyals to maintain that amount due to the appreciation of our national currency,” he explained. “That may be the only way remittances could go up.”

Pakistan’s national currency in recent days has appreciated due to stronger inflow of remittances, resumption of the stalled International Monetary Fund program and the sale of $2.5 billion worth of Eurobonds.