KARACHI, Feb 22: The foreign exchange sent by overseas Pakistanis rose to $667.5 million in the first seven months of the current fiscal year from $549.3 million in a year-ago period.

The State Bank statistics show an increase of 20 per cent in home remittances from various countries, including the United States, between July-January 2000-01 as compared to the remittances received in July-January 1999-00.

Home remittances from Kuwait jumped to $106.8 million from $68 million chiefly because of compensation paid by Kuwait to Pakistani Gulf War affectees.

But the increase of $38.8 million is a little over one third of the $118.2 million rise in total home remittances of the first seven months of the fiscal 2000-01. That is there has been a rather general upward trend in inflow of foreign exchange through home remittances.

Bankers say what has helped them attract more foreign exchange through home remittances is a progressive improvement in delivery of the amount sent back home. The state-run as well as the private banks claim they have cut the time taken in the delivery of remittances to 24 hours in the cities and 48 hours in the rural areas. But this claim is hard to digest given the common complaints about delay in the delivery of remittances.

The statistics show the largest amount of remittances ($189 million) came in from Saudi Arabia followed by the United Arab Emirates ($137 million) and Kuwait ($106.8 million) during the period under review. In the same period of fiscal 1999-2000 home remittances from Saudi Arabia were slightly higher at $190 million; followed by $98.8 million from UAE and $68 million from Kuwait.

In the first seven months of the current fiscal year remittances from the USA and Dubai have risen significantly compared to the same period of last fiscal year. Remittances from the US rose from $44.8 million in July-January 1999-2000 to $74 million in July-January 2000-01 and those from Dubai went up from $58 million to $95 million.

Remittances from the UK also increased from about $44 million to about $49 million. Overseas Pakistanis based in Canada, Norway and Abu Dhabi also sent back home slightly higher amounts of foreign exchange in the first seven months of this fiscal year than they had remitted in the same period of last fiscal year.

And those based in Japan doubled the home remittances-from $0.9 million to $1.98 million.

Home remittances averaging around a billion dollars per year are the second biggest source of foreign exchange earnings for Pakistan after exports.

Bankers and financial analysts say home remittances can be increased manifold to help the country meet its foreign exchange liabilities. But the authorities have so far failed to do this.

Senior bankers estimate that overseas Pakistanis send back home $8-$10 billion every year of which only $1 billion or so comes through banking channel and the rest through Hundi. They say the share of official remittances can be raised significantly by reducing the difference between interbank and kerb market exchange rates and by offering some incentives to those remitting money through banks.

Over the years home remittances coming through the banking system has fallen not only because of lower interbank exchange rates and inefficient bank services but also due to falling confidence in Pakistan's documented economy. The freezing of foreign currency accounts in May 1998 shattered this confidence so badly that home remittances fell from $1.2 billion in fiscal 1997-98 to only $875 million in 1998-99. In fiscal 1999-2000 home remittances rose to $913 million after partial revival of the confidence. Senior bankers and financial analysts say the figure may cross a billion dollars mark in the current financial year.