Remittances in Pakistan fell by 29% year-on-year in April 2023, to $2.25 billion. This was the seventh consecutive month of decline in remittances. The decline was attributed to a number of factors, including:
- Currency fluctuations: The Pakistani rupee has depreciated significantly against the US dollar in recent months, making it more expensive for overseas Pakistanis to send money home.
- The use of hawala and hundi: Hawala and hundi are informal money transfer systems that offer better rates than the official banking system. This has led to an increase in the use of these systems, which are not regulated by the government.
- The long Eid holidays: The Eid holidays in April 2023 were longer than usual, which reduced the number of working days and led to a decline in remittances.
Despite the decline in remittances, they remain a major source of foreign exchange for Pakistan. In the first 10 months of the fiscal year, remittances amounted to $22.7 billion, down 13% from the same period last year.
The government is taking steps to boost remittances, including: Promoting the use of the official banking system by offering incentives to overseas Pakistanis.
Cracking down on the use of hawala and hundi. Stabilizing the exchange rate.
It is hoped that these measures will help to reverse the decline in remittances and boost Pakistan’s economy.
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