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KARACHI, September 9, 2026: Chairman of the Exchange Companies Association of Pakistan (ECAP) Malik Muhammad Bostan has said that the State Bank of Pakistan (SBP) purchased around $27 billion from the foreign exchange market over the past three years.
He said the purchases were substantial and helped prevent the US dollar from falling further against the rupee. According to Bostan, the dollar could have fallen below Rs200 if the central bank had not bought these dollars from the market.
Bostan said Pakistan’s interbank foreign exchange market is not operating as a completely free market. He explained that a genuine free-floating system would allow customers to convert their rupees into dollars at the prevailing interbank exchange rate, subject to market conditions.
“For example, if a person has Rs100,000 in a bank account and needs dollars, they should be able to ask their bank to convert the amount into dollars at the prevailing interbank rate,” he said.
However, Bostan said banks often tell customers that dollars are not available. He added that banks may provide the conversion facility after customers purchase dollars from the open market and deposit them into their accounts.
“This is neither completely free float nor completely controlled—it is something in between,” Bostan said.
He added that Pakistan could only afford a genuine free-floating exchange rate system after building foreign exchange reserves of around $70 billion. At present, he said, the country’s reserves are not strong enough to support a completely free-floating currency regime.
Bostan also linked Pakistan’s economic challenges to political instability. He said political uncertainty is weakening investor confidence and discouraging investment.
He urged political parties to resolve their differences through dialogue.
“If political forces cannot sit together and hold talks now, then when will they?” he asked.
Bostan also highlighted Pakistan’s role in efforts to secure a ceasefire between the United States and Iran. He credited Prime Minister Shehbaz Sharif and Field Marshal Asim Munir with playing an important role in the process.
He said Pakistan’s diplomatic efforts had helped improve the country’s international image. He added that the international community is appreciating Pakistan’s efforts to promote peace.
Bostan questioned why the same approach could not be used to resolve political differences at home.
“When Pakistan’s leadership can bring the United States and Iran to the negotiating table, why can it not facilitate dialogue among political forces within the country?” he asked.
He stressed that political stability is essential for economic stability. According to Bostan, investors will remain cautious until the country achieves greater economic certainty.
“People will not invest in the country until the economy achieves stability,” he said.
Bostan also expressed concern over Pakistan’s declining savings rate. He said national savings have fallen to 6.4 percent. He added that delayed payments to farmers are creating further financial pressure on the agricultural sector.
He also warned that Pakistan faces growing risks from floods and climate change. According to Bostan, the shortage of dams means large quantities of floodwater are wasted.
At the same time, floods cause heavy damage to crops, populated areas and livestock. Farmers often struggle to protect their crops during severe flooding.
Bostan also pointed to the risks posed by melting and bursting glaciers. He warned that climate change could create serious challenges for Pakistan in the coming years.
“Pakistan will face serious challenges in the coming years because of climate change, but unfortunately, we have not made adequate preparations,” he said.
To address the issue, Bostan proposed building major dams at intervals of around 100 kilometres along floodwater routes. He also suggested developing a network of smaller dams where large projects are not feasible.
He stressed that Pakistan needs stronger water-storage infrastructure. Such projects could reduce flood damage while preserving water for agriculture and other economic activities.
