Pakistan has relaxed restrictions on foreign exchange outflows, allowing multinational companies to repatriate a significantly higher amount of profits and dividends during the first quarter of FY26, signaling renewed investor confidence and policy normalization under the IMF’s structural reforms.
According to the State Bank of Pakistan (SBP), foreign firms sent $752 million abroad in July–September, marking an 86 percent jump from $404.5 million in the same period last year. The sharp rise follows years of suppressed outflows due to dollar shortages and administrative curbs imposed to stabilize reserves.
The policy easing aligns with commitments under Pakistan’s ongoing IMF program, which emphasizes restoring market-driven foreign exchange operations and ensuring smooth access for investors to repatriate profits.
Despite a current account surplus of $110 million in September, underlying pressures persist, as the trade deficit widened to $9 billion in the first quarter, and the government continues to seek debt rollovers to meet external financing needs.
China remained the top destination for profit repatriation, receiving $205.6 million, a sixfold increase from $34.3 million last year. However, Chinese foreign direct investment (FDI) into Pakistan declined sharply to $188 million from $502.6 million, indicating a cautious stance by investors despite relaxed policies.
Other major destinations included the United Kingdom ($162.2m), United States ($68m), and Netherlands ($92.3m). Sector-wise, power ($186m) and banking ($182m) led repatriations, followed by telecom ($68m) and food ($62m).
Analysts view the latest data as a positive signal to foreign investors, reflecting the government’s efforts to restore credibility in the forex market and rebuild investor trust. With SBP reserves at $14.4 billion, policymakers are expected to maintain a more open stance on repatriations throughout FY26, balancing capital account flexibility with external stability.
