ISLAMABAD: Pakistan has experienced a substantial 44% increase in workers’ remittances during the early months of the current fiscal year (July-August), according to state-run media. The surge is attributed to the policies of the Special Investment Facilitation Council (SIFC) and the government’s aggressive crackdown on foreign currency smuggling.
Workers’ Remittances: A Vital Pillar of Pakistan’s Economy
Remittances play a critical role in bolstering Pakistan’s foreign exchange reserves and helping reduce the current account deficit. At a time when the country is emerging from a prolonged economic crisis, the inflow of remittances is key to supporting Pakistan’s external account, stabilizing foreign reserves, and strengthening its currency.
Record-Breaking Increase in Remittances
As per statistics from the State Bank of Pakistan, remittances have soared to $5.94 billion during July-August, an increase of $1.81 billion compared to $4.12 billion in the same period last year. State broadcaster Radio Pakistan credited this remarkable growth to the support provided by the SIFC, which was established in July last year to facilitate foreign investments, particularly from Gulf countries.
Crackdown on Illegal Money Transfers Stabilizes Exchange Rates
The government’s efforts to curb illegal money transfer systems such as Hundi and address currency smuggling have been instrumental in stabilizing the exchange rate and increasing foreign reserves. Last year, Pakistan’s government launched a major crackdown on currency smugglers and hoarders after the US dollar soared, leading to a preference for informal banking channels. This crackdown has since helped create a more stable and formalized remittance process.
SIFC’s Role in Promoting Overseas Employment and Investment
The SIFC’s initiatives, alongside the government’s promotion of employment for Pakistanis abroad, especially in the Middle East, have been pivotal in ensuring a steady stream of remittances. The focus on foreign investment is critical for Pakistan’s long-term economic growth, as it seeks to recover from economic turmoil.
This rise in remittances marks a positive step toward economic recovery, providing much-needed support to the country’s foreign exchange reserves and overall financial stability.
