The State Bank of Pakistan (SBP) has allowed exchange companies to conduct short-term forward sale transactions against home remittance receipts to improve liquidity and encourage more inflows through formal channels into the country.
Under the revised framework, exchange companies can now enter forward sale agreements with authorized banks for up to five working days once remittance inflows are received.
The mechanism allows firms to lock in exchange rates in advance, reducing exposure to currency fluctuations.
It is basically an agreement to sell dollars at a predetermined price on a future date to shield the value of your sent money.
The decision is being viewed to stabilize external inflows at a time when remittances remain a critical pillar for Pakistan’s external account and foreign exchange reserves.
According to recent figures, exchange companies in Pakistan facilitated around $5 billion in inflows, while total worker remittances reached approximately $38 billion in fiscal year 2024–25.
Industry stakeholders welcomed the move. Zafar Paracha, president of the Exchange Companies Association of Pakistan, said the decision reflects the central bank’s willingness to engage with market participants and address operational challenges in the remittance sector.
He said the new mechanism would help improve compliance, strengthen liquidity management, and ultimately encourage higher remittance flows through official banking channels rather than informal routes.
Traders expect the new forward sales facility to provide additional flexibility to exchange companies.