Islamabad: Exchange companies in Pakistan reported a 30 per cent year on year surge in foreign currency sales to commercial banks during August, signaling resilient inflow channels despite regional geopolitical headwinds. According to official data released by the Exchange Companies Association of Pakistan (ECAP), financial institutions received USD 248.7 million from exchange firms in August, up significantly from USD 174.9 million recorded during the same period last year.
The strong performance in August helped offset a sluggish July, where sales had dropped to USD 230.7 million compared to USD 290.6 million in July of the previous fiscal year. Collectively, exchange companies routed USD 479.5 million to commercial banks during the first two months of the current fiscal year (2MFY27), exceeding the USD 465.5 million registered in 2MFY26.
Despite stable remittance figures so far, financial analysts and market participants remain cautious regarding the broader economic fallout of ongoing conflicts in the Middle East. While Pakistan’s worker remittances have not yet suffered a direct contraction, unverified reports of expatriate worker returns from Gulf nations have created underlying anxiety. Currency experts warn that a prolonged regional conflict could depress economic activity across the Middle East particularly in major employment hubs like the UAE potentially threatening Pakistan’s ambitious USD 44 billion remittance target for FY27. Furthermore, rising global oil prices remain a significant strain on the national import bill.
Domestically, localised political friction in Kashmir also temporarily throttled potential foreign currency inflows due to connectivity issues. ECAP Chairman Malik Bostan noted that normalisation in the region is underway following the partial restoration of internet services, estimating that an additional USD 50 million in inflows could have been captured during July and August had digital infrastructure remained fully operational. ECAP has formally requested the State Bank of Pakistan to assist in securing full internet access across Kashmir to optimise future transaction flows.
