The State Bank of Pakistan has introduced a new measure allowing exchange companies to lock exchange rates for a short period, a move aimed at improving remittance inflows while helping reduce pressure on the Pakistani rupee.
Under the new system, exchange companies will be allowed to enter short-term arrangements with banks after receiving remittances, enabling them to secure exchange rates for up to five working days. This gives firms more certainty in managing foreign currency transactions and reduces the risk of losses caused by sudden currency fluctuations.
The step is also expected to encourage more inflows of US dollars from overseas workers by making formal remittance channels more stable and attractive compared to informal routes.
Remittances remain one of the most important sources of foreign exchange for Pakistan, helping support the country’s external account and easing pressure on foreign reserves amid ongoing economic challenges.
Market participants say the policy could improve confidence in the system by ensuring exchange companies can better manage liquidity while offering more predictable rates to customers.
Zafar Paracha, president of the Exchange Companies Association of Pakistan, welcomed the decision, saying it reflects the central bank’s effort to strengthen the remittance ecosystem and address operational challenges faced by the sector.
He added that the new mechanism would improve liquidity management, enhance compliance, and encourage greater use of official channels for sending money home.
