Pakistan's struggling economy enjoyed a significant surge of foreign currency late last year as expatriate workers sent money home from abroad.

Bankers said the wave of money was triggered by fears among Pakistanis working abroad that investigations into money laundering after 11 September could lead to the indiscriminate freezing of bank accounts.

Expatriate Pakistanis sent home $1.3bn (�0.9bn) through official banking channels in the eight months since July 2001, more than twice as much as over the previous financial year.

In February alone more than $236m was sent to Pakistan from abroad, three times more than the same period the year before.

The amount of cash sent by the Pakistanis living in the US swelled almost fivefold during the period to $332m, while remittances from Canada rose six fold to $12m. Inflows from the Gulf states were also up by nearly 50%.

Helping hand

The huge transfer of funds helped the State Bank of Pakistan (SBP) to boost its foreign reserves.

It has also proved useful to the country's economy, which was hit by the war in the neighbouring Afghanistan as trade fell and the number of refugees rose.

The recent lifting of the international sanctions, US commitments to boost investments and to renegotiate the state debt, have also supported the economy.

Pakistan has also enjoyed an increase in overseas investment, even though the amounts are still dwarfed by the flow of expatriate funds.

According to the SBP, total investment in the country grew to $180m in the nine months since July 2001, up from $82m a year ago.