Foreign Currency accounts in Pakistan have a bad history. Some may not have long memories and some of the members may be too young to remember but the people who suffered do.
Let me remind you about what happened to the foreign currency deposits in 1998.
In the aftermath of the Atomic Tests by Pakistan on May 31, 1998, at Chaghai, (in response to the Indian 2nd atomic Test) the US imposed sanctions on Pakistan and the IMF suspended disbursements to Pakistan. Fourteen other countries including Japan followed the US and suspended aid to Pakistan. The direct effect of this was that Pak Rupee declined from 46 to a US dollar to 63 by mid-July 1998.
This prompted the then PML-N gov’t to freeze Foreign Currency accounts. Later these were reopened but one could only withdraw in Pak Rupees at the rate prior to devaluation. In otherworld’s, the foreign currency account holders lost nearly 30% value through no fault of theirs.
The income earned by the overseas Pakistanis (except for a very select few) is literally from the sweat of their brow. Should the economic conditions fail to improve considerably, what guarantee is there that something similar will not be repeated?
The proposed scheme is no doubt very good because the interest rate offered is at least 50% better than what you get in the UK/US. However, even though for the sake of Pakistan I hope it succeeds, I do not think that overseas Pakistanis have sufficient trust in the stability of Pakistan’s currency to pour in billions of dollars.
