Exchange companies contributed $4 billion in Pakistan’s remittance inflows during the first half of the current fiscal year (FY25), with $2 billion sold to banks and another $2 billion utilised in the open market.
The crackdown on unauthorized currency trade in 2023 has not only curtailed illegal activities but also bolstered formal remittance channels.
Pakistan is on course to receive $35 billion in total remittances by the end of FY25, reflecting a 33% increase compared to the previous year, according to industry experts.
“The situation has significantly improved. We sold $2 billion to banks in the first half and expect the same amount in the next half,” said Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan (ECAP). He added that another $2 billion was sold in the open market, catering to various expenditures, including Haj expenses, travel, education, immigration, and medical needs.
Paracha noted that approximately $800 million of the funds sold in the open market were allocated for Haj expenses. He emphasized the need for parity in incentives between banks and exchange companies to further boost remittance inflows. Currently, banks earn Rs2 per dollar in remittances, while exchange companies receive Rs1. “We are in discussions with the government and remain optimistic about achieving parity,” he said.
Remittances from overseas Pakistanis remain the country’s largest source of foreign exchange, outpacing export earnings. In FY24, remittances through banks totaled $30.25 billion, while exchange companies contributed an additional $3.8 billion.
