Exchange Companies Drive $4 Billion in Remittances During First Half of FY25

Exchange companies have contributed 4 billion dollars to Pakistan remittance inflows during the first half of the ongoing fiscal year FY25. Of this, 2 billion dollars were sold to banks, while another 2 billion dollars were used in the open market.

The crackdown on unauthorized currency trading in 2023 has not only reduced illegal activities but also strengthened formal remittance channels.

Pakistan is projected to receive 35 billion dollars in total remittances by the close of FY25, representing a 33 percent increase compared to the previous year, according to industry experts.

The situation has improved significantly, noted Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan. He stated that 2 billion dollars were sold to banks during the first half of FY25, with a similar amount expected in the latter half. Another 2 billion dollars were sold in the open market to meet various needs such as Haj expenses, travel, education, immigration, and medical costs.

Paracha highlighted that around 800 million dollars of the open market funds were allocated specifically for Haj expenses. He also emphasized the importance of equal incentives for banks and exchange companies to further enhance remittance inflows. Currently, banks earn 2 rupees per dollar in remittances, while exchange companies earn 1 rupee. Paracha expressed optimism about achieving parity as discussions with the government continue.

Remittances from overseas Pakistanis remain the largest source of foreign exchange for the country, surpassing export earnings. In FY24, remittances through banks amounted to 30.25 billion dollars, with exchange companies contributing an additional 3.8 billion dollars.