Pakistan traders seek to revive Dubai currency trade as Iran war disrupts flights: report

Pakistani traders are attempting to restore currency trade with Dubai after flights and commercial activity were disrupted following the US-Israel attack on Iran, Dawn reported, quoting some traders as saying. 

Dubai serves as a major financial hub for regional trade, where many Pakistani businesses operate to benefit from tax and business facilities not available domestically.

Exchange companies said they have accumulated foreign currencies and are attempting to send them to Dubai to purchase US dollars.

“We have collected foreign currencies and a person is expected to fly to Dubai to buy dollars against these currencies,” said Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP).

According to Paracha, currencies such as Saudi riyal, UAE dirham and other non-dollar currencies are typically sent to Dubai, where they are exchanged for US dollars before being brought back to Pakistan.

“So far, a flight from Lahore was expected to depart at 3:30am for Dubai, and our representative carrying foreign currencies would travel on the same Emirates Airline flight,” he said.

Officials from the exchange companies said the accumulated foreign currencies currently stand at around $50 million.

“Foreign currencies other than the dollar have accumulated to $50 million. If we manage to send it to Dubai and bring it back in dollars, it means the trade relationship with that country has begun,” ECAP Chairman Malik Bostan said.

The UAE is Pakistan’s second-largest trading partner. Bilateral trade reached about $10.1 billion in FY25, and prolonged disruption could affect commercial activity between the two countries.

Bostan added that remittance inflows typically rise during Ramazan, often increasing by around 20 per cent. However, the conflict has disrupted travel plans of overseas workers in the Middle East who normally bring foreign currency with them when returning to Pakistan.

“The overseas workers in the Middle East were expected to reach Pakistan during this month but the war has stopped them,” he said, adding that activity in the open currency market has slowed as both buyers and sellers remain cautious.