ISLAMABAD, Oct 3: Overseas Pakistanis sent $2.4 billion foreign remittances to Pakistan in 2001-2002 which will further jump to $3 billion during the current financial year, claimed Finance Minister Shaukat Aziz.

“There is a reverse flight of capital...and we are sure of having $3 billion remittances in 2002-2003 from the overseas Pakistanis,” he added.

Speaking at a news conference here on Thursday, he said that expatriates were interested in making investment in real estate and stocks.

Newly arrived from the US, the finance minister said that some of the US banks, including Western Union, have assured help to increase Pakistani remittances from the United States.

The foreign exchange reserves are set to rise to $9 billion in December this year from the current level of $8.2 billion, before surging to $10 billion by June 30, 2003, he claimed.

In September alone, we have had a $600 million increase in reserves, he pointed out.

He was of the view that if the oil prices in the international market remained stable or continued to go down, Pakistan could see its reserves adequately replenished

“Due to increase in reserves, our foreign debt, which stood at $36 billion, now theoretically stand at $30 billion,” he said.

The SBP, he said, was maintaining $6 billion cash while the rest of the reserves were being managed by the commercial banks.

According to an understanding with the IMF, Pakistan was supposed to have $4.2 billion which have now jumped to $8.2 billion.

He said the central bank will continue to intervene to make sure that there was no unnecessary increase in Pakistan rupee viz-a-viz the dollar.

“The dollar would have an exchange value of Rs50 today, had there been no intervention by the SBP,” he said, adding that the government was also taking care that the exporters did not get hurt due to unnecessary appreciation of Pakistani rupee.

Responding to a question, the finance minister pointed out that the government was expecting $1 billion Foreign Direct Investment (FDI) next year as against $484 million of 2002. The oil and gas sector, he said, was fetching substantial foreign investment.

“And we are hoping to have a couple of major privatization deals to get good money,” he said, adding that foreign companies currently operating in Pakistan were also expected to enhance their current level of investment.

Asked how would Pakistan cope with the situation in the event of a US attack on Iraq, he said this was a very serious issue which had been discussed during the recently-concluded World Bank/IMF annual meetings in Washington.

“We were told in Washington that the Organisation of Petroleum Producing Countries will produce more oil in case of US attack on Iraq to help stabilize the oil prices,” the finance minister said.