Interbank vs open market rate: why Pakistan has more than one dollar rate

The short answer

When people search for the "dollar rate in Pakistan", they find more than one number. The interbank rate is the price at which banks trade US dollars with each other and with large customers. The open market rate is the price at which licensed exchange companies buy and sell cash dollars from the public.

The official PKR rate is published by State Bank of Pakistan (SBP), and the card above shows the SBP mark-to-market rate in rupees per unit of each currency, with its date and source. Banks and exchange offices quote their own buy and sell rates.

Both rates follow the same supply and demand for dollars. They are separate markets with different participants, rules and costs, so their prices are rarely identical.

What the interbank rate is

The interbank market is where commercial banks buy and sell foreign currency among themselves. Most of the country's trade flows through it, including import payments, export proceeds, loan repayments and most home remittances.

• Who sets it: no single body. Banks quote prices to each other based on the dollar inflows and outflows they handle. The State Bank of Pakistan (SBP) regulates the market. It can also step in as a buyer or seller.
• Who uses it: importers, exporters, corporates, and banks covering their own positions. Ordinary people do not trade at this rate directly. When you buy dollars from your bank, you pay a customer rate that the bank sets near the interbank level.
• Where to see it: the SBP publishes daily reference rates on its website, such as the mark-to-market revaluation rate and weighted average customer rates. Our page on SBP exchange rates explains what each published rate means.

A bid is the price a dealer pays to buy dollars. An offer (or ask) is the price at which it sells. The difference between them is the dealer's spread. Interbank spreads are usually narrow because the deals are large and the participants are banks.

What the open market rate is

The open market rate is the cash rate for individuals. It covers buying dollars for travel, study fees or personal holdings, and selling dollars you bring home.

• Who sets it: exchange companies licensed by the SBP. Each company sets its own buying and selling prices. The industry association publishes indicative daily rates that newspapers often quote.
• Who uses it: travellers, students, families, and anyone dealing in physical cash.
• Why it differs: cash costs more to handle. Notes must be imported, stored, insured and checked. Demand also comes from individuals, whose behaviour can change quickly when people expect the rupee to weaken.

Exchange companies follow SBP rules on customer identification, documentation and transaction limits. Check the current requirements with the exchange company or on the SBP website before a large purchase, because these rules are revised from time to time.

The kerb market

The term kerb market is used loosely. Some people use it for the open market in general. Strictly, it means unlicensed currency dealing outside banks and licensed exchange companies, together with informal transfer channels known as hawala or hundi.

The SBP does not authorise this activity. It carries legal risk under foreign exchange law and gives the buyer no protection if a deal goes wrong. Kerb rates are unofficial and are not published by any regulator. Any figure you see for them is hearsay, not a reference rate.

Comparison at a glance

Why the gap between rates widens

In normal conditions the open market rate sits a little above the interbank rate. The difference reflects cash handling costs and dealer margins. The gap grows when the markets come under different pressures. Past episodes have shared some common features:

1. Dollar shortages in the formal system. When reserves are low or import payments are restricted, banks ration dollars. Demand then moves to cash, and the open market price rises faster.
2. Administrative management of the interbank rate. If the interbank rate is held more stable than underlying demand justifies, the pressure shows up in the open and informal markets instead.
3. Expectations of devaluation. People who expect the rupee to fall buy cash dollars to hold. That pushes up the open market rate even before the interbank rate moves.
4. Informal channels competing with banks. A large gap makes hawala and hundi more attractive for remittances. Fewer dollars then reach the banking system, and the shortage that caused the gap gets worse.

The gap has narrowed in the past through a mix of policy steps. These included a more market-based interbank rate, closer supervision of exchange companies, enforcement action against illegal dealing, and support from external financing. The IMF and Pakistan page covers how programme conditions relate to exchange rate policy.

Interest rates and the rupee

Interest rates affect the rupee through capital flows and import demand. The latest decision shown by the SBP: SBP policy rate raised by 50 bps to 12% with effect from 27.10.2026 (MPC). For more on how rates, inflation and remittances interact, see what moves the rupee, the SBP policy rate page, and remittances to Pakistan.

Buying dollars for overseas trading platforms

Some readers ask whether they can buy dollars at the open market and send them to an online broker abroad. The SBP's position is that remitting foreign exchange outside Pakistan for this purpose is not allowed: per the SBP, remitting foreign exchange to overseas forex/margin/CFD platforms is not allowed through any payment channel (FERA s.5(1)). Read our law and regulators page before making any decision. Leveraged forex and CFD trading can also lose money fast, regardless of how the money is funded.

Frequently asked questions

Which is the "real" dollar rate in Pakistan?

Both the interbank and open market rates are real prices in their own markets. The interbank rate is the reference for banks and trade. The open market rate is what you pay or receive for cash at a licensed exchange company.

Why is the open market rate usually higher?

Cash costs more to handle, and exchange companies add their own margin. When cash demand rises faster than supply, the difference grows.

Does the SBP fix the interbank rate?

The SBP regulates the market and publishes reference rates. Banks set prices through their dealing. The SBP can still influence the rate by buying or selling dollars and through its policies.

Where should I check current rates?

For interbank reference rates, use the SBP website. For cash rates, ask a licensed exchange company or check the association's indicative rates. Our exchange rates section explains each source.

Is it legal to buy dollars from a street dealer?

Dealing outside banks and SBP-licensed exchange companies is not authorised. It gives you no legal protection, and you may also receive counterfeit notes.

Can the gap predict where the rupee is heading?

A wide gap shows stress in the dollar supply. It is not a reliable forecast. Many other factors move the rupee, and past episodes do not repeat in the same way.