Foreign exchange reserves are an important economic indicator that show the true picture of economy and draw the attention of foreign investors. Situation of FER is far better than the past but still a lot of work has to be done. Efficient mechanism and prudent economic policies are need of the hour to support Pakistan growing economy.
This was upshot of the speeches delivered at a seminar on "Strengthening Foreign Exchange Reserves and Providing Lucrative Invectives" at the Lahore Chamber of Commerce & Industry on Tuesday. LCCI Senior Vice President Amjad Ali Jawa, Vice President Muhammad Nasir Hameed Khan, CEO/Director of LSE Financial Services Ltd Asif Baig Mirza and Convenor of the LCCI Standing Committee on Foreign Investment & Privatisation Mian Muhammad Nawaz were prominent amongst other experts.
The speakers said the size of foreign exchange reserves is markedly important due to increased global trade, capital flows and currency volatility. During any crisis, foreign exchange reserves come to the rescue of any country to absorb the distress related to such crisis. They said that foreign exchange reserves enhance the capacity of the central bank of the country to intervene in the foreign exchange market to manage exchange rate stability.
The LCCI Senior Vice President said that Pakistan's foreign exchange reserves have reached the historic high level of $24 billion in October 2016. Though situation is quite satisfactory yet foreign exchange reserves could be increased further if we get rid of trade deficit. The overseas Pakistani workers remitted $19.9 billion during the year which shows growth of 6.38 percent compared with $18.719 billion received during fiscal year 2014-15. He said incentives should be given to Pakistani workers working abroad to encourage them to use only banking channel for remittances. He said initiatives should be taken to make our ranking in ease of doing business.
LSE Financial Services Ltd's chief executive officer and director Asif Baig Mirza, in his presentation, said that foreign exchange reserves add to the comfort of market participants that domestic currency is backed by external assets and hence it also helps the equity markets of the country with lesser country risk, better credit rating, more foreign portfolio investment and stable exchange rate. The foreign exchange reserves are an important catalyst for poverty alleviation, economic growth and development, he added.