Pakistan exchange companies sell $6 billion to banks in FY26 amid record remittances

Pakistan's exchange companies sold an estimated $6 billion to commercial banks during fiscal year 2025-26, industry officials said, supporting the foreign exchange market alongside record workers' remittance inflows. The sales averaged nearly $500 million a month and came as regulators tightened oversight of the sector.

How much did exchange companies sell to banks in FY26?

Exchange companies supplied about $6 billion to commercial banks in FY26, averaging close to $500 million every month, according to the Exchange Companies Association of Pakistan (ECAP). The steady dollar supply strengthened the formal foreign exchange market and supported liquidity across the banking system throughout the year.

An exchange company official said the sector played a significant role in maintaining foreign exchange liquidity despite a stricter regulatory environment. "Exchange companies supplied $6 billion to banks during FY26, averaging nearly $500 million every month. This contributed significantly to strengthening the formal foreign exchange market and supporting the country's external sector," the official said.

How much did Pakistan receive in remittances in FY26?

The dollar supply came as Pakistan received a record $41.6 billion in workers' remittances during FY26, making overseas Pakistanis one of the country's largest sources of foreign exchange. Data released by the State Bank of Pakistan on Thursday showed remittances rose 8.6% from $38.3 billion in the previous fiscal year.

In June alone, workers' remittances totaled $3.5 billion, up 2.0% from a year earlier but down 18.3% from May. Saudi Arabia was the largest source of inflows at $829.6 million, followed by the United Arab Emirates at $792.2 million and the United Kingdom at $514.9 million.

What regulatory changes affected exchange companies this year?

Pakistan's foreign exchange sector underwent significant regulatory changes during FY26. The State Bank of Pakistan canceled the licenses of at least five exchange companies over regulatory violations, while another company voluntarily surrendered its license.

As part of broader reforms, the central bank encouraged commercial banks to establish wholly owned exchange companies to expand formal remittance and foreign exchange services. A total of 14 banks have launched exchange companies so far, reflecting a shift toward bank-led formal channels.

Why did the State Bank withdraw remittance incentives?

The State Bank of Pakistan also withdrew incentives it had previously offered to banks for attracting workers' remittances. Market participants said the incentive program, estimated at around PKR120 billion, came under scrutiny from the International Monetary Fund.

That scrutiny contributed to the program's discontinuation. Analysts said record remittance inflows and increased dollar supplies from exchange companies still helped ease pressure on Pakistan's external account and supported its foreign exchange reserves during the year.