Foreign exchange companies have significantly reduced their dollar sales to banks, with the volume falling by about 30%in the first half of fiscal year 2026, compared to the same period last year. Banks received roughly $1.4 billion from currency exchangers during July–December 2025, down from $2 billion in the corresponding months of 2024.
The sharp decline in sales has raised concerns about the flow of dollars through the formal enbanking system. Despite exchange companies being required to channel surplus dollars into banks, a large portion of the dollars sold to the public did not enter the banking system. According to Malik Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), around $1.2 billion was bought by the public, but only $400 million of that amount was deposited into banks, leaving approximately $800 million unaccounted for.
This drop in foreign exchange company sales to banks is a continuation of a broader trend observed since mid‑2025. For example, in June 2025, about $408 million in dollars were sold to banks, but by August, this number had fallen to $163 million before showing some improvement toward the end of the year.
While remittance inflows remain high, the decline in sales to banks might be linked to the growing use of alternative markets for foreign currency, such as the virtual currency market, which remains largely unregulated in Pakistan. This trend is complicating efforts to track dollar flows accurately.
