It is generally believed that with depreciation of a country's currency, its exports become cheaper thus getting more orders

for exports which brings more domestic jobs which turns into more disposable income and prosperity, but this is hardly the case for Pakistan. Since we are producing low-tech traditional products such as textiles, the depreciation in currency gets quickly translated into increase in input prices which account for more than 80% of total costs in most cases. Thus our profit margin gets tough with forced upward change in export prices and nominal increase in export orders. As such, there are no clear benefits of depreciation of currency to the Pakistani economy and to the common man in general.

In Pakistan's case a stable and relatively strong rupee vs dollars provides more benefits to the economy and prevents inflation from increasing rapidly as one of the factors. Pakistan's economy is heavily dependent upon imports for essential items and any unfavorable change in its currency against world's leading currencies directly impacts the buying power of common man. There are hosts of factor which affect the exchange equality of rupee vs dollars such as widening trade deficit, repayment of foreign loans, decrease in foreign financial/capital investments (FDI) etc. These factors put negative pressure on the currency as the outflow of dollars is more than the inflow thus affecting the currency rate in a negative manner.

In Pakistan's case, one of the major source countering the negative pressure on exchange equality is the growth in home remittances from overseas Pakistanis as remittances account for the second largest source of inflow of Dol1ars. The continuous growth in remittances over the last few years has consistently kept a check on the free fall of rupee against the dollar.

In FY 2012, expat-Pakistanis sent around US $13.186 billion as remittances through formal channels. Home Remittances have grown at an average rate of around 20% in the last few years, with banking sector contributing around 89% of the inflows. Exchange companies have contributed the remaining 11% in bringing remittances from the overseas Pakistanis. This tremendous growth in remittances is mainly attributable to the following factors: 1. SBP and government efforts to channelize remittances through the banking system. 2. Improvement in the system and technology by the banking sector, making it possible to receive money from overseas in minutes (conditions apply) and in most cases within a day. 3. Decrease in the cost of sending funds due to incentives offered by the government. 4. Reduction in the kerb market premium. 5. Increase in the skill level of workers. 6. Support from expatriates for flood-affected households. 7. Lack of investment opportunities abroad due to global economic slowdown. 8. Crackdown on some of the exchange companies involved in dubious activities.

Realising the importance of home remittances almost all Pakistani banks are now venturing into remittance business and have invested a great deal both in terms of financial and human resources, a business area previously ignored. Large Pakistani banks have taken the lead with HBL, UBL and NBP contributing around 50% of the total inward remittances. National Bank of Pakistan has deployed the most extensive resources in the remittances business by establishing an independent Group for pursuing home remittances. In just over two years time, NBP has increased its global coverage and outreach by 300% resultantly its free of charge remittance business increased to over 150,000 remittance transactions per month from just 1,900 transactions per month a couple of years back.

The need of the hour is to further promote the home remittance business as it is estimated that even today almost USS 10 billion are being sent by overseas Pakistanis through illegal Hawala/Hundi channel every year. At present, Pakistan is receiving around US $1.10 billion per month in terms of home remittances through official channels. This inflow of foreign exchange is not to be repaid as compared to foreign loans, which also have associated costs in the form of mark up and are not received against strict and difficult terms such as the Coalition Support Fund (CSF), which was only USS 1.18 billion annually, received after lengthy negotiations. If only we educate our expats and promote the home remittance business in a way to capture the remaining US $10 billion per year, among other things our currency will become strong as there will be no repayment pressure resultantly contributing to a stronger Pakistan.

Last but not the least, Pakistan has a large, young, energetic and talented pool of human resource with around 60% of its total population of 187 million falling under the age of 25 years. Serious efforts need to be made to inculcate desired skills as per international requirements and export human resource to traditional as well as new markets. If committed, co-ordinated and focused efforts are made, receiving home remittances of US $30 billion/annum in the next five years is very much possible.

Pakistan is facing severe energy shortages, which are bound to affect both the agriculture sector due to shortage of fertilizers and exports because of frequent outages of electricity and gas. A substantial increase in home remittances will certainly improve the economic situation of the country with positive impact on among other things on standard of living of common man and on law and order situation. Unfortunately the concerned quarters are not giving the due importance to home remittances that it deserves.