Govt looks towards overseas Pakistanis to boost reserves

The Pakistani government is looking to attract funds from its diaspora through bonds or deposits in a bid to boost its foreign exchange reserves.

According to reports, non-resident Pakistanis will soon be able to open digital accounts from next week which will allow them to invest in the Pakistan Stock Exchange (PSX), buy government debt and carry out basic banking functions.

According to a report published in Bloomberg, the opening of the digital accounts will be facilitated by eight domestic banks. Non residents Pakistanis will be able to deposit either Pakistani rupees or US dollars in these accounts.

Remittances from non resident Pakistanis are an important source for foreing exchange for the country. Foreign remittances for Pakistan stood at $23 billion during FY20 which was higher than the $21 billion export revenue the country earned during that period.

Earlier in 2013, India adopted a similar strategy by using a discounted swap window to attract inflows of around $34 billion from its overseas citizens. The country also used its diaspora to attract foreign exchange in 1998 and 2000 to ease pressure on its local currency.

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