The State Bank of Pakistan has introduced key reforms to the foreign exchange framework for Gwadar Free Zones, allowing companies to directly convert Chinese RMB into Pakistani rupees. The move removes the mandatory dollar conversion requirement, significantly reducing transaction costs for businesses operating in the Gwadar South and North Free Zones.
Officials said the reform addresses long-standing operational challenges faced by Chinese and foreign firms since the zones became functional in 2023. Previously, companies were required to route RMB through the US dollar, leading to repeated exchange losses and financial inefficiencies that affected trade competitiveness.
Under the revised policy, eligible companies can now maintain Special Foreign Currency Accounts, retaining up to 50 percent of their earnings for trade payments and remittances. The decision was finalized during a high-level inter-ministerial meeting involving SBP, FBR, Gwadar Port Authority, and China Overseas Ports Holding Company.
Authorities are also reviewing proposals to further enhance incentives by increasing foreign currency retention limits and aligning Gwadar Free Zones with Export Processing Zones. Legal amendments are under consideration to ensure long-term regulatory clarity, reinforcing Gwadar’s position as a regional trade and investment hub.
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