Why is Pakistan's Central Bank Restricting Foreign Currency Sales?
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Synopsis
Pakistan's central bank has implemented new regulations for foreign currency sales, requiring account-to-account transfers for deposits into FCY accounts. This shift may lead to significant delays in fund access for residents. While aimed at controlling dollar outflows, critics argue that it disproportionately benefits bank-affiliated exchange outlets over independent money changers.
Key Takeaways
- The SBP requires account-to-account transfers for foreign currency sales.
- Delays in fund access are anticipated, especially for interbank transfers.
- Independent money changers may face increased competition challenges.
- Documentation requirements aim to enhance transparency.
- Critics warn of potential customer dissatisfaction and trust erosion.
New Delhi, Nov 26 (NationPress) The State Bank of Pakistan (SBP) has mandated that all foreign currency sales for resident citizens must now be executed through account-to-account transfers for deposits into foreign currency (FCY) accounts, which may lead to delays in accessing funds, according to reports.
This regulation is framed as a measure to manage the outflow of dollars and to prevent money changers from accumulating large amounts of foreign currency in bank accounts. However, independent exchange companies argue that this directive primarily favors bank-owned exchange outlets, as reported by Ceylon Wire News.
With the SBP encouraging banks to establish their own exchange branches, these new rules may direct customers towards these banks.
Furthermore, the restrictions on holding cash dollars in bank accounts further diminish the competitiveness of independent money changers, as they struggle against bank-affiliated firms, the report suggests.
Essentially, individuals looking to buy dollars for deposits will no longer receive cash; instead, the funds will be transferred directly into their FCY accounts. For those lacking these accounts, the ability to purchase cash dollars has been effectively removed.
Exchange companies are now required to issue cheques that customers will need to deposit into their FCY accounts. This operational shift necessitates that exchange companies update their systems and verify customer accounts for cheque transfers, adding administrative complexities.
This increase in documentation is meant to prevent misuse and promote transparency. Nevertheless, for average citizens, especially those who may not be familiar with banking processes or who lack access to formal accounts, this could become a burdensome procedure.
Transfers within the same bank will be prompt, but interbank transfers could take a minimum of five days, and could extend to 20-25 days for transactions involving euros and pounds, according to reports.
Critics are concerned that these changes will slow down transactions, leading to customer dissatisfaction and a loss of trust in the banking sector.
Point of View
I believe that while the SBP's intention to regulate foreign currency transactions is to stabilize the economy, the implications for ordinary citizens and independent money changers must be carefully considered. The balance between regulation and accessibility is crucial in maintaining public trust.
NationPress
26/11/2025
Frequently Asked Questions
What are the new rules regarding foreign currency sales in Pakistan?
The State Bank of Pakistan has mandated that all foreign currency sales for residents must be conducted through account-to-account transfers for deposits into foreign currency accounts.
Why has the SBP implemented these changes?
The SBP aims to manage dollar outflows and prevent money changers from hoarding foreign currency in bank accounts.
How will these changes affect access to funds?
Individuals will face delays in accessing funds, as interbank transfers could take several days.
Are independent exchange companies affected by these regulations?
Yes, these regulations may weaken independent exchange companies and drive customers towards bank-affiliated outlets.
What should residents know about the process of buying foreign currency now?
Residents will now receive funds directly into their foreign currency accounts instead of cash, and exchange companies are required to issue cheques for deposits.
