Dollar deposits in Pakistan have increased to Rs87 billion during the first nine months of FY26, reflecting sustained demand for foreign currency despite tighter regulatory measures imposed by the central bank.

The latest figures mark a significant reversal from the same period last year, when banks recorded a net withdrawal of Rs9 billion in dollar deposits, indicating a renewed shift toward holding foreign currency within the formal banking system.

The State Bank of Pakistan has introduced stricter rules in recent months to curb dollar outflows and stabilize currency movement. However, the data suggests that overall demand for US dollars remains strong despite these restrictions.

Market observers note that in the previous year, a substantial portion of foreign currency purchased by individuals did not remain in banks and was instead diverted toward cryptocurrency-related activity, which contributed to weaker deposit growth.

With the enforcement of new regulations under the Virtual Assets Act 2026, the use of dollars in digital asset markets appears to have declined, encouraging a return of foreign currency into regulated banking channels.

At the same time, access to physical US dollars has become more controlled. Exchange companies are now required in many cases to issue rupees via banking instruments, while individuals face limits of $950 per identity card and up to $2,000 annually. Despite these restrictions, foreign currency accounts continue to be used as a hedge against rupee volatility and for international financial transactions.