Ashraf Mahmood Wathra Governor State Bank of Pakistan (SBP) showed concern on artificial shortage of foreign currencies and instructed exchange companies to play their due role to mitigate these negative sentiments. In a meeting with the representatives of exchange companies on 23rd July, 2015 in SBP Karachi the Governor also assured that the central bank will also take necessary steps in this regard.
After the Eid holidays a sudden increase was witnessed in exchange rate and dollar was being traded at Rs 103.50 on Thursday in the open currency market that compelled the central bank to call a meeting of exchange companies to review the situation. During the meeting governor SBP showed concern over the shortage of foreign currencies in open market and directed exchange companies to take measurers for stable exchange rate in the market.
He warned of strict action against exchange companies involved in the manipulation and urged companies to keep fair their business. Governor asked companies' representatives to strictly compliance with SBP's directive issues for exchange business. During the meeting Malik Boostan chairman Forex Association of Pakistan informed that open currency market is volatile due to higher demand of greenback as the market was opened after five continues Eid holidays. However he said that the recent uncertainty is temporary and market is likely to stable in coming days.
Quoting the reason of higher exchange rate in open currency market he said that banks are not making payment of foreign exchange to the companies as Middle East market was also closed from last one week. The inflows are likely to normalize in few days, he added.
Boostan also informed the meeting that some demand has also raised from Hajj pilgrims as Hajj flights are likely to begin in August and they have started buying of dollar and Saudi Riyal for their journey. He also revealed that due to imposition of 0.3 percent tax on bank transactions for non-filers, they are trading in dollar to avoid the tax. Talking about the smuggling, meeting was informed that besides coast guards, now the federal government has also authorized rangers and other law enforcement agencies for action against currency smuggling. This step will help to curb the currency or dollar smuggling.
Chairman Forex Association said that some positive impact of meeting have been witnessed on exchange rate as Pak rupee has gain some Rs 0.40 in open currency market on Friday. Dollar was being traded at Rs 103.10 on Friday evening compared to Rs 103.50 on Thursday.
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