ISLAMABAD, Dec 9: Overseas Pakistanis have purchased special saving certificates and special defence certificates worth over $500 million only in one month period.

According to sources in the Central Directorate of National Saving (CDNS), these certificates were sold in the United Arab Emirates (UAE) in November this year, and there were expectations that by December 30, 2002, about $100 million would have been sold due to better interest rate being offered to overseas Pakistanis.

The sources said the UAE government had allowed Pakistan to sell these special certificates to overseas Pakistanis. “Now we are hoping to shortly get a permission from Bahrain to sell these certificates there,” an official concerned said.

He did not agree that interest rates on saving schemes have declined and said this rate was still about 9 per cent compared to 2.5 to 3 per cent of the commercial banks.

National Saving Schemes (NSS) are domestic debt instruments, geared towards retail investors and administered by the government of Pakistan’s CDNS. Currently, there are available six long-term schemes with maturities ranging from 3 to 10 years. Given the high NSS interest rates that exceed the rates of other government securities, the share of NSS borrowing in domestic debt has been constantly increasing (from 33 per cent in 1996-97 to 46 per cent in 2000-01).

Meanwhile, it was also learnt that the country’s current foreign exchange reserves of over $9 billion were now sufficient for ten-and-a-half months of imports. And these reserves were expected to be equal to one year of imports after reaching to over $10 billion by the end of 2002-03. The target of achieving $9 billion reserves was set for end December which has been completed before time.

The increase in reserves is said to be due to increase in remittances. “And this increasing reserves assure our economic sovereignty and hopefully the ongoing Poverty Reduction Growth Facility (PRGF) will be the last IMF programme in Pakistan,” a senior official of the Ministry of Finance said.

He said that increase in foreign exchange reserves also reflected continued confidence of the investors in the economic policies of the government.

Overseas Pakistanis have earlier sent $1.4 billion in first four months (July-Oct) of the current financial year, which were expected to reach to $3 billion by June 30, 2003.

“Trends were very good and we hope that more and more remittances will be sent by the overseas Pakistani with a view to further help strengthen the Pakistani economy,” another official said.

The flow of remittances has experienced a dramatic increase as it doubled from the last year’s level and played a pivotal role in strengthening the overall position of foreign exchange reserves.