KARACHI: Pakistan’s exporters are increasingly turning to forward dollar selling to hedge against the growing uncertainty surrounding the rupee’s exchange rate, according to market insiders. Despite a slight appreciation in the Pakistani rupee (PKR) against the US dollar, confidence in long-term stability remains shaky.
Currency dealers revealed that the forward market has become an active tool for exporters who want to lock in exchange rates before any major market shift. Many fear potential volatility once the State Bank of Pakistan (SBP) relaxes its current exchange rate management policies — particularly under the watchful eye of the International Monetary Fund (IMF).
The Exchange Companies Association of Pakistan (ECAP) reported that while the rupee continues to show small daily gains of 1–3 paisas, cash dollar sales by exchange firms have plunged between 50 to 60 percent. This sharp decline points toward a significant fall in open market inflows.
Market sources told Dawn News and Geo News that overseas Pakistanis, who once sold dollars in the open market, are now holding back — possibly diverting their transactions through informal channels. Dealers have described this new trend as alarming, noting that the lack of dollar liquidity could pressure the open market in the coming months.
Authorities, however, remain vigilant. The SBP and government agencies continue their strict monitoring of foreign exchange activities to curb illegal dollar trading. Dealers also noted a decline in dollar sales from exchange companies to banks, although remittance inflows through official channels have remained stable compared to the same period in FY25.
Bankers confirm that this situation isn’t tied to changes in government incentives. Official SBP data supports this claim, showing no major dip in remittances during July and August. Despite several government measures to strengthen the rupee, results have been limited, with open-market dynamics and IMF oversight keeping the currency under pressure.
Experts believe that exporters’ rising use of forward contracts highlights persistent doubts about exchange rate management. Although the central bank has slowed its dollar buying from the interbank market to avoid undue pressure, the risk of renewed interventions remains a key factor shaping market sentiment.
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