KARACHI: Pakistan’s open currency market continues to struggle with an acute shortage of US dollars, leaving travellers, students and overseas remitters facing mounting difficulties as exchange companies grapple with shrinking supplies of greenbacks.
Market visits across Karachi reveal a troubling trend: many exchange outlets are now selling only the dollars they receive from customers, while several have stopped selling altogether. Others are rationing sales, limiting customers to as little as $100 per transaction, reflecting a widening gap between demand and supply.
Travellers Hit Hard as Dollar Availability Shrinks
The shortage has come at a particularly inconvenient time, with year-end holidays and international travel plans underway. Several travellers reported being unable to purchase dollars even at airport exchange counters, forcing them to buy alternative foreign currencies locally at unfavourable exchange rates.
One passenger travelling to Southeast Asia said they were compelled to buy Malaysian ringgit in Pakistan at a significantly higher rate than global benchmarks, resulting in avoidable financial losses just hours before departure.
Compounding the issue, some exchange companies only have older-design US dollar notes, which are often rejected or exchanged at lower value abroad, further complicating matters for international travellers.
Students and Families Feel the Pressure
Beyond tourism, the dollar shortage is also affecting students and families who rely on foreign currency for education-related expenses. Several individuals reported visiting multiple exchange companies without success, even for legitimate, non-speculative needs such as tuition payments and living expenses for siblings studying overseas.
Industry observers warn that prolonged scarcity could disrupt overseas education plans and increase reliance on informal channels, exposing families to higher risks and costs.
Regulatory Measures Add to Market Constraints
Exchange dealers attribute part of the problem to stricter regulatory requirements introduced in recent months. These include mandatory biometric verification, the requirement of an original CNIC, and additional facial recognition checks, which some customers — particularly veiled women — find difficult to complete.
More recently, exchange companies have also been instructed to issue cheques instead of cash for customers depositing dollars into foreign currency accounts, adding another layer of procedural complexity.
While a few outlets are showing flexibility by accepting digital CNICs, many remain reluctant to sell dollars, citing compliance risks and limited supply.
Industry Acknowledges Supply-Demand Imbalance
The Exchange Companies Association of Pakistan has acknowledged the imbalance, noting that when dollars are unavailable, exchange firms are expected to record customer details and attempt to arrange currency at a later stage. However, dealers admit that with inflows drying up, fulfilment has become increasingly difficult.
Market insiders warn that while overt dollar smuggling has reduced, hoarding and informal holding may be emerging as new challenges, further tightening availability in the formal market.
Digital Currencies Raise New Questions
Interestingly, while physical dollars are scarce, access to dollar-pegged digital currencies has expanded through online platforms. However, banks are currently barred from engaging with stablecoins or crypto-based payment rails until a clear regulatory framework is issued by authorities.
Financial experts caution that the shift toward unregulated digital alternatives could expose users to losses and fraud, especially in the absence of consumer protections.
Outlook Remains Uncertain
Despite repeated attempts to seek clarification, no official response has been issued by the central bank regarding immediate steps to ease the shortage. Until supply conditions improve or regulatory clarity is provided, analysts believe the dollar crunch is likely to persist, keeping pressure on travellers, students and legitimate currency users across Pakistan.
