Currency traders trying to reconnect with Dubai
KARACHI: Traders have been trying to revive trade links with Dubai, as the relationship was disrupted following the US-Israel attack on Iran, which turned Dubai into a war zone.
Traders said two flights were likely to depart from Karachi and Lahore for Dubai tonight, but were unable to identify who these people are or why they want to enter Dubai while the war is still ongoing.
Dubai is a global financial centre, while hundreds of Pakistani companies operate there to benefit from tax exemptions and other facilities not available in Pakistan.
“We have collected foreign currencies and a person is expected to fly to Dubai to buy dollars against these currencies,” said Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan (ECAP). Foreign currencies such as Saudi Riyal, UAE Dirham, and all currencies other than US dollar are collected and sent to Dubai to purchase dollars.
So far, a flight from Lahore was expected to depart at 3.30am for Dubai, and our representative carrying foreign currencies would travel on the same Emirates Airline flight,” said Mr Paracha.
The UAE is Pakistan’s second-largest trading partner. In FY25, the trade volume was $10.1bn. If the trade remains halted for a longer period, both countries will face significant losses.
“Foreign currencies other than the dollar have accumulated to $50 million. If we manage to send it to Dubai and bring it back in dollars, it means the trade relationship with that country has begun,” ECAP Chairman Malik Bostan said.
He said the inflow of remittances during Ramazan usually increases by 20 per cent. “The overseas workers in the Middle East were expected to reach Pakistan during this month but the war has stopped them, which means the foreign currencies used to come with them are not entering the market,” he said, adding that the open market during these days is dull; with no activity as both buyers and sellers have disappeared.
Foreign exchange reserves of the State Bank of Pakistan rose by $87 million to $16.300 billion during the week ending on Feb 27. The total liquid foreign reserves held by the country stood at $21.434bn, including $5.134bn held by commercial banks.
Published in Dawn, March 6th, 2026