KARACHI: Pakistan’s central bank on Thursday allowed exchange companies to route home remittances through its instant payment system, Raast, saying the move aims to promote digital transactions and improve the efficiency of inflows, as the country’s foreign exchange reserves rose modestly in the latest week.

The State Bank of Pakistan (SBP) said in a statement that the country's total liquid foreign reserves stood at $21.25 billion as of Jan. 9, while the central bank’s own reserves rose $16 million to $16.07 billion.

The statement said the decision to extend Raast to exchange companies forms part of the central bank’s broader push to strengthen digital payments infrastructure and support a shift toward a cashless economy.

“Building an innovative and inclusive digital financial services ecosystem is one of the key objectives of State Bank of Pakistan under its Strategic Plan 2023-2028,” the SBP said.

“In furtherance of this vision, SBP has now allowed Exchange Companies (ECs) to utilize ‘Raast,’ a state-of-the-art payment system launched by SBP in 2021, to facilitate remitters and beneficiaries of home remittances,” it added.

Raast, a real-time digital payment system, allows instant and low-cost transfers between banks, microfinance institutions and electronic money wallets.

“Through this enablement, the beneficiaries receiving remittances through ECs can receive their funds in their accounts and wallets ... in a safe and efficient manner,” the statement said.

Pakistan relies heavily on workers’ remittances from abroad and has been seeking to channel more inflows through formal banking systems by strengthening digital and regulated payment networks, as authorities try to curb informal mechanisms such as hawala and hundi, underground value transfer systems that move money outside the banking sector.