Foreign exchange firms sell $646 million to banks in Q1 FY26, down from $750 million last year

Foreign exchange firms sold $646 million to banks in the first quarter of FY26, marking a decline from $750 million during the same period last year. This decrease reflects a shortage of physical dollars and lower inflows from overseas Pakistanis, according to a news report. 

Monthly data also indicates a steady drop in dollar sales. Exchange companies sold $290 million in July, which fell to $170 million in August and slightly recovered to $186 million in September. 

In contrast, sales during the same months in FY25 were higher, with $333 million in July, $294 million in August, and $213 million in September.

The Exchange Companies Association of Pakistan (ECAP) attributed the decline to reduced remittances and delays in dollar payments from banks to exchange firms. ECAP Chairman Malik Bostan noted that while the sales figure was lower than last year, it was still considered satisfactory. 

“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,” Bostan said.

Market sources highlighted a growing scarcity of physical dollars, with exchange companies increasingly opting to issue dollar-denominated cheques for deposit into foreign currency accounts. 

Dealers pointed out that the shortage is partly due to delays in payments from banks, making it more difficult to access physical cash from the open market.

Currency experts have noted that remittance growth this year appears weaker compared to FY25, with concerns about a “managed” exchange rate that may divert some inflows away from official banking channels. Despite the rupee’s recent appreciation, analysts believe the current exchange rate may not fully reflect true market conditions.

Bostan remained optimistic, stating that remittance inflows remain satisfactory, and expressed confidence that the target of $40 billion for FY26 would be achieved. 

On the other hand, overseas workers sent $3.2 billion in remittances to Pakistan in September 2025, an 11.3% year-on-year increase from $2.9 billion in September 2024. On a month-on-month basis, remittances rose 1% from $3.1 billion in August. 

In the first three months of FY26, total remittance inflows reached $9.5 billion, up 8.4% from $8.8 billion during the same period in FY25.