Pak: Remittances slump 22% as expats use illegal channels amid currency gap

Remittances in Pakistan decreased by 22 percent in the first two months of the fiscal year as expatriate workers chose unauthorised methods to send money home amid the widening gulf between official and unofficial currency rates, The News International reported.

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According to figures from the central bank, the country received USD 4.12 billion in remittances from July through August, down from USD 5.29 billion during the same period last year. Remittances totaled USD 2.09 billion in August alone, down 24 percent year over year but up 3.1 percent month over month.

According to analysts, the fall was mostly caused by the significant disparity between interbank and grey market rates, which last month reached as high as 10 percent and encouraged many Pakistanis living abroad to transfer money using illegal channels like hawala and hundi.

A drop in deposits made to Roshan digital accounts, a scheme designed to draw foreign currency deposits from expats, was another contributing cause, The News International reported.