SBP Lets Exchange Firms Lock PKR-Dollar Rates in Advance to Increase Remittances

The State Bank of Pakistan (SBP) has announced a major policy change to increase remittances and stabilize the foreign exchange market, allowing exchange firms to fix Pakistani rupee and US dollar rates in advance.

According to the central bank’s new framework, exchange firms will now be able to enter into short-term forward sale transactions with banks (authorized dealers), which will allow them to “lock” the dollar rate in advance in exchange for remittances.

Earlier, companies had to sell the remittances they received immediately in the market on the same day, exposing them to rate fluctuations. The new move will help them in better planning and risk management.

According to experts, this facility will:

Help bring remittances into formal channels

Reduce market uncertainty

Improve the performance of exchange companies

Authorities say that this move will not only improve foreign exchange liquidity but is also expected to provide better rates to overseas Pakistanis, which could increase remittances.

Pakistan receives billions of dollars in remittances during the financial year, and the SBP’s recent policy reforms aim to make these inflows more stable and transparent