Pakistan, April 12 -- Pakistan's central bank on Friday allowed exchange companies to enter short-term forward sale transactions against the receipt of home remittances, in a move that can boost remittance inflows.

Remittances are a lifeline for the cash-strapped South Asian economy, playing a critical role in stabilizing foreign exchange reserves and supporting balance of payments. A forward sale is an agreement to sell an asset, such as commodities, real estate, or securities, at a specified price on a set future date, acting as a hedging tool and allowing parties to mitigate risks of future price fluctuations.

"In order to facilitate Exchange Companies in mobilizing additional home remittances, it has been decided that they may enter...