KARACHI, Sept 9: The government has planned securitisation of $700 million remittances being sent by overseas Pakistanis to ease pressure on the rupee.

Sources said the plan was being finalised and a few top foreign banks were engaged, which means early encashment of future receivables.

Pakistan had received record remittances of about $6.5 billion during the last fiscal year. The remittances have been witnessing a rising trend for the last five years. In the first month of the current fiscal year remittances maintained this trend.

During the last fiscal year, the country had to face record current account deficit and half of which was met by the remittances.

As imbalances have created a serious threat and have made multiple impacts, the country is in dire need of foreign exchange.

The shortage of dollar has already increased pressure on the rupee which lost one-fifth value against the dollar, trade and current account imbalances are haunting economic managers of the country and fast depleting reserves may lead the country to a default.

Sources said that the re-entry of the IMF is also expected as lender of the last resort.

Moreover, the government has started removing all kinds of subsidies which were being provided for oil and food sector.

The removal of subsidies suddenly resulted in increasing prices of food and petroleum products, which engulfed the entire economy and inflation touched over 24 per cent.

Bankers were of the view that Pakistan had strong position over remittances which were rising.An analyst said if securitisation of $700 million plan was completed, it would be a temporary respite for the country as the problem could not be handled with this ‘meagre’ step.

The country’s reserves slid to below $9 billion while the oil import bill alone could be over $12 billion, even after fall of oil prices in the international market.

Currency dealers said the possible inflow of $700 million through securitisation would give hope for better performance of the local currency.