KARACHI: Despite stronger dollar inflows this fiscal year, importers are struggling to access foreign currency, with prices rising beyond official rates, banking industry sources said on Wednesday.

According to bankers, only 20 to 30 per cent of importers are currently able to get permission to buy dollars for import payments. This comes even as the State Bank of Pakistan (SBP) maintains there are no formal restrictions on imports.

Official trade data for May show an 8pc decline in imports and a 23pc reduction in the trade deficit on a month-on-month basis.

“Banks have been told to arrange dollars for imports, which is a difficult solution. Some banks are facing a tough situation,” said Atif Ahmed, a currency dealer in the interbank market.

Paying Rs2 to Rs3 more per dollar than quoted interbank rate

Mr Ahmed explained that a handful of banks — informally referred to as ‘export banks’ — receive the bulk of export proceeds and are among the few institutions able to arrange dollars. However, the shortage persists, pushing up the effective price of the greenback beyond the official rate.

“Importers are paying Rs2 to Rs3 more per dollar than the quoted interbank rate,” he added. “Some are buying at Rs285, while the official SBP rate on Wednesday was around Rs282.”

Zafar Paracha, representing the open market, dismissed concerns of panic. “Some demand pressure is due to the Haj season,” he said. “Buying dollars from the open market is not easy since buyers must submit documentation and satisfy investigation agencies. A buyer can acquire up to $500 with ease, but purchasing over $1,000 may attract the attention of the Federal Investigation Agency.”

Faisal Mamsa, CEO of Tresmark, noted that the rupee remained stable last week as external payment pressure eased. “Despite market rumours of an imminent depreciation, there’s little fundamental justification. Even open market rates have stabilised,” he said.

While the rupee continues to depreciate slowly against the dollar, the greenback itself has weakened internationally — falling nearly 9pc on the dollar index, which tracks performance against a basket of global currencies.

Some currency dealers argue that the gradual depreciation of the rupee is a pragmatic strategy to manage external obligations. A sharp drop in the rupee’s value could prompt exporters to hold on to their proceeds in hopes of better rates.

“Exporters are still selling their proceeds as usual, but if the rate gap widens further, they may delay their transactions,” said a senior banker.

The banker added that higher remittance inflows are helping stabilise the exchange rate, which in turn supports economic stability. Pakistan is expected to receive $38 billion in remittances during FY25, while the target for FY26 has been set at $39bn.

Published in Dawn, June 5th, 2025