KARACHI, May 13: Overseas Pakistanis sent more than $11.5 billion remittances during the first 10 months of the current fiscal year, almost equal to the entire present reserves of the country.

Country’s reserves are considered as total holdings of the Central Bank as well as commercial banks. The SBP holds $6.772bn while commercial banks hold $5.090bn.

The State Bank reported on Monday that remittances during July-April 2013 were 6.3pc higher than the same period of last year.

The poor reserves are critical for the country but the amount of remittances was so high that it almost absorbed the huge negative impact of the trade deficit of previous nine months which was $11.6bn.

The overseas Pakistanis have been sending increasing remittances each year which helped the country avoid default on external obligations, particularly bulk repayments to International Monetary Fund (IMF).

This was noted that the increase in remittances this year was not as high as it was last year.

During the first 10 months of the previous year, growth in remittances was 20pc.

The low growth this year carries some concerns for the government.

Currency dealers in banks and open markets have no clear idea why growth is much slower than last year but they believe that rising terrorism, high political uncertainties and poor economic growth could have been the reason for slow growth of remittances.

However, despite slower growth, the amount sent by overseas Pakistanis was so big that it was counted as blessing for the country which helped exchange rate regime to remain within control despite the fact that dollar is being traded at Rs100 in the open market.

Currency dealers were in high sprits and they expect that the new government of Nawaz Sharif would improve economy, bring more dollars from friendly countries and make deal for loans with IMF that is needed to avoid default.

Despite this, the local currency slightly depreciated in both the open as well as inter-bank markets.

Details of the SBP report reveal some interesting facts that funds were possibly sent for general elections also by the overseas Pakistanis.

Earlier, currency dealers had indicated that funds were coming for political parties contesting the general elections.

The significant growth in remittances was noted from Saudi Arabia and England, both the counties have large Pakistani community.

During the 10 months, remittances from Saudi Arabia increased by 13pc or by $384m compared to last year. In April alone, remittances were up by $60m from this country.

Similarly, remittance from England were 22pc higher or by $348m during the 10 months.

In April, remittances from the country increased by $45m. The higher remittances in April from the two countries endorsed the information of currency dealers in the inter-bank market that funds were coming for political parties.

The overall remittances in April increased to $1.215bn compared to $1.1421bn during the same month last year.

The monthly average remittances for the 10 months were $1.156bn as compared to $1.087bn during the corresponding period of last fiscal year.