Pakistan’s foreign exchange companies sold $646 million to banks in the first quarter of fiscal 2026, a 14% decline from $750 million in the same quarter a year earlier, as the country faces a reduced supply of physical dollars and reduced remittance inflows from visiting overseas Pakistanis.
The Exchange Companies Association of Pakistan (ECAP) attributed the drop to reduced remittances and delays in dollar payments from banks to exchange firms. “We have sold $646 million in the banking market during the first three months of FY26. Though lower than last year, the figure is not discouraging,” ECAP Chairman Malik Bostan said in a statement.
Monthly data shows a steady decline: exchange companies sold $290 million in July, $170 million in August, and $186 million in September. By comparison, sales in the same months of FY25 were $333 million, $294 million, and $213 million, respectively.
According to Dawn, the market participants report a shortage of physical dollars, with exchange companies increasingly issuing dollar-denominated cheques for deposit in foreign currency accounts. Dealers say the scarcity is exacerbated by banks delaying payments to exchange firms, making it harder to access cash in the open market.
Currency experts point to weaker remittance growth this year and concerns over a “managed” exchange rate, which may be diverting some inflows away from official channels. Despite the rupee’s appreciation over the past two months, some analysts argue the current rate does not reflect true market parity.
Pakistan received $38 billion in remittances in FY25 and has set a target of $40 billion for the current fiscal year. Bostan said remittance inflows remain satisfactory and expressed optimism about meeting the FY26 goal. Analysts believe maintaining last year’s inflow level would help support exchange rate stability.
