Exchange firms sell record $450m to banks in May

KARACHI: Exchange companies sold a record $450 million to the banks in May, helping the country build the reserves required to meet the twin deficits.

With the highest-ever remittances of $3.24 billion in May, inflows via exchange companies were also the highest in the current fiscal year.

Some exchange companies estimate that around $4bn would be sold to banks during FY24, which could be another record.

“So far, in May, we have sold about $450m to the banks, which I believe is the highest amount in a single month in FY24,” said Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan.

Some financial market experts believe the higher inflows were due to Eidul Azha. However, Mr Paracha did not fully agree with this perception.

“There are eight days left in Eid, which means more inflows will come through the exchange companies,” said Mr Paracha.

He expects higher inflows in June. “The exchange rate stability and a sharp deceleration in inflation have strengthened the confidence of overseas Pakistanis,” he said, adding that investments are also coming in for buying real estate due to falling prices.

Remittances in May jum­ped 54pc compared to the same month last year, pushing the total to $27.093bn in 11MFY24. Market experts said the total could touch the $30bn mark.