ISLAMABAD: Pakistan has seen a “significant increase” in workers remittances at the beginning of the current fiscal year from July-August, state-run media reported on Monday, crediting the surge to the Special Investment Facilitation Council’s (SIFC) policies and the government’s crackdown on the smuggling of foreign currency. 

Workers remittances form a cornerstone of Pakistan’s economy, significantly contributing to the country’s foreign exchange reserves and reducing the current account deficit. Remittances also play a major role in supporting Pakistan’s external account, especially at a time when the country is recording small gains after a prolonged economic crisis that diminished its foreign reserves and weakened its national currency. 

“There has been a significant increase of forty-four percent in remittances at the beginning of the current fiscal year due to the support of the SIFC,” state broadcaster Radio Pakistan reported. 

“According to the statistics released by the State Bank of Pakistan, remittances have reached 5.94 billion dollars with an increase of 1.81 billion dollars compared to 4.12 billion dollars in July-August last year.”

The SIFC was set up in July last year to serve as a “one window operation” to address any concerns of foreign investors, with a special focus on attracting funds from Gulf nations. The government has recently actively promoted the employment of Pakistanis abroad, especially in the Middle East, to ensure a steady increase in investments, crucial for the country’s economic growth.

The state broadcaster said that the government’s crackdown against illegal money transfer systems such as Hundi and the smuggling of dollars led to a stable exchange rate and increase in foreign reserves. 

Pakistan’s government last year launched a crackdown against currency smugglers and hoarders when the cost of the US dollar soared, as people preferred informal banking channels to remit money to relatives in Pakistan.