Exchange firms can sell 20% of remittances in open market: SBP


KARACHI: Exchange companies(ECs) have been allowed to trade 20 of remittances in the open request to ease pressure on the rupee, said the State Bank of Pakistan on Thursday.

The exchange enterprises had requested Finance Minister Ishaq Dar last week to allow at least half of the remittances to be used by the open request with an anticipation that this move would drop the bone’s demand and lower its rate in the currency request, The News reported.

“On our request, the governor State Bank of Pakistan has enabled the exchange companies to vend 20 of workers’ remittances to the general public,” said Malik Bostan, president of the Exchange Companies Association of Pakistan(ECAP) in a statement.

before, these enterprises were surrendering 100 of workers ’ remittances in the interbank request. The exchange enterprises bring home remittances with the help of plutocrat transfer drivers in their accounts maintained with banks in the country.

The rupee has been under pressure due to the strong demand for the bone in the request. On Thursday, the rupee was trading at 227.75 against the bone in the open request.

Bostan, along with other members of ECAP, held a meeting with SBP Governor Jameel Ahmad and thanked him for helping exchange companies whenever they face any problem.
The president said the exchange enterprises are buying and dealing bones as per the rate set by ECAP.

“Due to the low rate of exchange companies, guests are dealing in the black request rather of dealing to change companies as their rate is 10 to 15 rupees further per bone
than exchange companies,” he said.

“Due to this illegal buying and selling, after September 2022, the business of foreign currency buying and selling of exchange companies has dropped by about 80. presently, 1 of guests are dealing bones at the counter of exchange companies, while buyers are 200 further than ahead,” he said.

“The exchange companies are facing a deficit of note. Now we’re only dealing bones to guests who want to travel to the US or shoot health and education freights. Bones are presently not being vended to guests holding US currency.”

The exchange enterprises suggested the government reduce credit card limits and the trip share from $10,000 to $5,000 to check bones.

Credit cards had been issued at a faster pace this time, putting the rupee under pressure. A person with a credit card can use it for transnational deals, which is like transferring bones
from Pakistan to abroad.

The exchange enterprises requested the finance minister Dar to rethink the trade policy with Afghanistan.

Bostan said every month, about$ 2 billion goes to Afghanistan from Pakistan in the shape of functionary and unofficial trade, abuse of Afghan conveyance trade, smuggling and through the borders, all of which are burdening Pakistan’s foreign exchange reserves.

“The government should incontinently open trade trade original currency letter of credit and trade through banking channel. Cash bone trade should be banned.”

Another major reason is that the government has inked a$ 2 billion coal contract with the Afghan government, which is 22,000 tonnes per day with a value of $6 million.

Pakistan has been importing coal from Afghanistan for quite a long time. The payments against the significances were decided to be made in rupees to Afghani dealers.

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