Dollar shortage hits Pakistan: Travellers and students struggle amid limited supply

Dubai: Pakistan continues to face shortage of US dollars in the open market, with many currency exchanges “only selling what they buy,” creating difficulties for travellers and students alike.

Multiple exchange outlets in major cities of Pakistan revealed a dearth of greenbacks, with some dealers stopping sales entirely and others limiting purchases to $100 per customer, Dawn news reported. Only a few exchanges had old-design dollar notes, which are largely unsuitable for international travel.

Unfavourable rates

Passengers have been forced to buy foreign currencies at unfavourable rates. The shortage has also affected students sending money abroad for education. A Lahore resident said he visited 11 exchange companies but could not purchase dollars for a sibling’s tuition.

Changes

Experts attribute the crisis to changes in standard operating procedures (SOPs) for currency exchanges. New requirements include biometric verification, original CNICs, and facial recognition checks for certain transactions. A recent SBP circular mandates cheques for dollar purchases deposited into foreign currency accounts, further complicating access.

Malik Bostan, chairman of the Exchange Companies Association of Pakistan, acknowledged the supply-demand gap and said exchanges are expected to record customer information and facilitate procurement when dollars are unavailable.

Digital currencies

Despite the shortage at physical exchanges, digital currencies pegged to the dollar are increasingly being used, though banks are barred from engaging in such transactions until regulatory frameworks from the Pakistan Virtual Assets Regulatory Authority (PVARA) are in place.

Bostan also warned of potential illegal activity moving into unregulated crypto platforms, noting that while smuggling has largely been curbed, hoarding is becoming a growing concern.