KARACHI: Pakistan’s banking sector has recorded a sharp rise in US dollar deposits despite strict controls imposed by the State Bank of Pakistan, signaling persistent demand for foreign currency among residents.
According to latest data, US dollar deposits climbed to Rs. 87 billion during the first nine months of FY26, compared to a net withdrawal of Rs. 9 billion during the same period last year. The turnaround suggests a shift back toward depositing foreign currency in formal banking channels.
The increase comes despite tighter regulations introduced by the central bank to manage dollar outflows and stabilize the exchange market. However, continued demand for the US dollar indicates these restrictions have not dampened appetite for foreign currency holdings.
Analysts suggest one reason behind the rebound is reduced use of dollars for cryptocurrency activity. Last year, a significant share of foreign currency purchased by residents was reportedly diverted toward digital asset trading rather than bank deposits.
With the introduction of the Virtual Assets Act 2026 and broader oversight of digital assets, some of those funds now appear to be returning to the formal financial system.
At the same time, access to dollars has become more restricted. Exchange companies are required in many cases to provide rupees through cheques, while individuals face limits of $950 per identity card and up to $2,000 annually.
Foreign currency accounts continue to serve as a hedge against rupee depreciation and remain a key tool for residents seeking dollar exposure for savings and international transactions.
