RIZWAN BHATTI
KARACHI: In order to facilitate exchange companies, the State Bank of Pakistan (SBP) Tuesday allowed exchange companies 100 percent import of cash dollar against the export of permissible foreign currencies.
Now, ECs can import cash US dollars against the export of permissible foreign currencies without observing any limit. Exchange companies believe that with this move dollar supply in open currency market will increase and exchange rate will reduce in next few days.
The SBP on January 1, 2018 imposed restriction on import of cash dollar and exchange companies were asked that total import of cash dollars should not exceed 35 percent of total export of permissible foreign currencies during a month.
While, imposing restriction on cash import of dollar, exchange companies were allowed to import remaining 65 percent dollar import through banks, which mainly takes two to three days for delivery of imported greenback.
The SBP’s move created some shortage in the market and the dollar was appreciating against the rupee in the open currency market. The dollar touched Rs 113.50 in open currency market Monday due to higher demand and slow supply.
On the demand of exchange companies, the SBP has decided to withdraw restriction of 35 percent cash import of dollar to facilitate ECs.
According to SBP circular it has now been decided to allow exchange companies to import cash USD against the export of permissible foreign currencies without observing any limit and/or repatriate equivalent USD through credit to their foreign currency accounts maintained with banks in Pakistan till further instructions.
Earlier, State Bank in a meeting with the representatives of ECs decided to withdraw restriction on import of cash dollar aimed at facilitating ECs.
In order to address the issues of unstable exchange rate in open currency market, the SBP on Tuesday called a meeting of exchange companies. The meeting was chaired by SBP Deputy Governor Jamil Akhtar and attended by representatives of exchange companies including Malik Muhammad Bostan, President, Forex Association of Pakistan (FAP).
During the meeting DG SBP expressed concern over the rising dollar rate in open currency market.
Bostan said the US threats to Pakistan and the SBP’s restriction on cash import of dollar has created some panic in the currency market that resulted in higher demand of dollar and slow supply.
He urged the SBP to allow 100 percent import of cash dollar against export of permissible foreign currencies to enhance the supply in the open currency market.
On demand of ECs, Deputy Governor SBP assured that 100 percent import of cash US dollar facility will be restored to increase the supply and keep the exchange rate stable at a reasonable level in open currency market.
Bostan has appreciated the SBP decision saying that with this move the dollar rate will decline to Rs 111 in open currency market in next few days. He also urged the general public not to invest in USD as the current rate will decline soon.
