Remittances and the Economy Remittances are a key source of foreign exchange for Pakistan and play an important role in its economy. The government of Pakistan has taken steps to encourage more remittance inflows from abroad.

The country’s central bank has also asked commercial banks to keep 20 percent of deposits in the form of government bonds and securities to help build up the country’s depleting foreign exchange reserves.

This includes offering incentives to expatriate Pakistanis to send money through official channels and introducing new banking products such as shariah-compliant remittance accounts. The government has also created a 'Remittance Initiative' whereby expatriate Pakistanis can invest in the country's stock market and real estate sector.

In addition, the government has introduced a 'Remittance Reward Scheme' which provides incentives to expatriates who bring remittances into the country. Despite these efforts, the recent drop in remittances is a reminder of how precarious the economy is.

The country’s economic recovery will depend heavily on the success of the IMF package and the government’s ability to attract more foreign investment.