The State Bank of Pakistan (SBP) has introduced a new measure allowing exchange companies to conduct short-term forward sale transactions against home remittance inflows, in a move aimed at boosting liquidity and encouraging greater use of formal channels.
Under the revised framework, exchange companies can now enter into forward sale agreements with authorized banks for up to five working days after receiving remittances. This enables firms to lock in exchange rates in advance, helping them manage currency risk and reduce exposure to short-term fluctuations in the rupee-dollar market.
In simple terms, the mechanism allows companies to agree today on the rate at which they will sell dollars in the near future—protecting the value of incoming remittances and improving financial predictability.
The decision comes at a time when remittances remain a vital support for Pakistan’s external account and foreign exchange reserves. According to recent data, exchange companies facilitated around $5 billion in inflows, while total workers’ remittances reached approximately $38 billion during the fiscal year 2024–25.
Market participants have welcomed the move, viewing it as a step toward improving liquidity management and strengthening confidence in formal remittance channels. Industry leaders say the facility will also help enhance compliance and operational efficiency across the sector.
Zafar Paracha, President of the Exchange Companies Association of Pakistan, noted that the policy reflects the central bank’s proactive engagement with stakeholders and its willingness to address key challenges in the remittance ecosystem.
Analysts believe the introduction of forward sales flexibility will give exchange companies greater room to operate while encouraging overseas Pakistanis to send money through official banking channels instead of informal networks.
