OZAIR ALI KHAN LAHORE SCHOOL OF

SECTION-A PROFESSIONAL STUDIES ─

MSPM Fall-2019 UNIVERSITY OF LAHORE

SUBJECT: MANAGEMENT OF TECHNOLOGICAL ENTERPRISE

SUBMITTED TO DR. ALI SAJID

SUBMITTED BY: OZAIR ALI KHAN (MSPM02193015)

ASSIGNMENT TITLE:
ECONOMIC STRETAGIES TO INCREASE FORIGN EXCHANGE RESERVES OF
PAKITSAN:

INTRODUCTION:

Foreign exchange reserves play an important role in stabilizing the economy of any

country. In the case of Pakistan, it is the American dollar, which is of utmost

importance for our exports and imports. Unfortunately, the incumbent Pakistan

government does not have much foreign exchange reserves due to its trade

imbalance and other deficits piling upon our constrained economy.

In other words, we pay more American dollars for our imports than we receive. This

phenomenon also manifests that our imports are higher than our exports, as the

latter is not in a position to get the equivalent amount of dollars back into Pakistan.

The piling up of import bill exerts a tremendous amount of pressure to the current

account deficit.

Following are some strategies to increase foreign exchange reserves of Pakistan:

1) Remittances:

A way to increase foreign exchanges reserves in Pakistan is remittances. In this

regard, the government of the day should give maximum facilities to the overseas

Pakistanis to remit back foreign exchange through the legal banking system.

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OZAIR ALI KHAN LAHORE SCHOOL OF
SECTION-A PROFESSIONAL STUDIES ─
MSPM Fall-2019 UNIVERSITY OF LAHORE

2) Increase in foreign Investments:

Forex reserves across the world are mainly dependent upon FDI (Foreign Direct

Investment). Pakistan still needs to create an investment-friendly environment that

can inculcate the ease of doing business. Although the incumbent government is

willing to incorporate ease of doing business environment and transparency in

financial transactions, illegal means such as “Hundi” or “Hawala” still exist.

3) Increase in Exports:

The other option left with Pakistan is to decrease its imports and increase its exports.

Reverting to the fundamental current account deficit minimization mechanism,

substituting imports for exports seems to be a fair lead for the incumbent

government.

Again, if increasing exports is not possible then decreasing the imports is certainly

possible by reducing our dependency on unnecessary import commodities.

4) Home made Products:

All those items, which are home produced should be leverage against imported

items of a similar nature. In this manner too, we can save our hard-earned American

dollars.

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