Islamabad, Feb 13 (IANS): Remittances sent home by overseas Pakistani workers fell to over a two-year low as the dollar cap imposed to stabilise the rupee against the US dollar by the government earlier prompted illegal transfers through hundi, hawala, and other channels, media reports said.

Data released by the State Bank of Pakistan (SBP) showed that remittances fell to $1.9 billion in January 2023, compared to $2.1 billion in December 2022 and $2.18 billion in January 2022. In May 2020, remittance stood at $1.865 billion, Geo News reported.

Remittances dropped 9.9 per cent month-on-month and 13.1 per cent year-on-year, the central bank data showed. With a cumulative inflow of $16 billion during the first seven months — July to January — of FY23, the remittances decreased by 11 per cent compared to the same period last year, the report said.

The dollar cap was removed by the end of January as per International Monetary Fund (IMF) conditions to pave the way for the release of the critical $1.1 billion loan tranche.

Remittances during January 2023 were mainly sourced from Saudi Arabia ($407.6 million), the UAE ($269.2 million), the UK ($330.4 million) and the US ($213.9 million), Geo News reported.

Khaqan Hassan Najeeb, a former advisor to the Ministry of Finance, said remittances were substantially low — both year-on-year and month-on-month - in January, Geo News reported.

Najeeb said the January data should be of concern as the country faces a severe dollar liquidity crisis.