The State Bank of Pakistan (SBP) on Monday assured exchange companies of same-day payment of imported dollars by the banks. The US dollar has been appreciating against the Pak Rupee in the open currency market for the last four days. Dollar touched Rs 113.50 in open currency market due to rising demand and slow supply.
Representatives of Exchange Companies believe recent increase in greenback is due to SBP''s move, which has restricted cash import of dollar at 35 percent against export of permissible foreign currencies.
"The surprising decision of SBP in respect of dollar import has led to create panic in open currency market. As per new SBP directives exchange companies have been asked to limit the cash import of US Dollar, against the permissible export of foreign currencies, at 35 percent, while remaining 65 percent will be routed through the banks", they said and added that this move has directly hurt the market mechanism and pushed the rate of US Dollar from Rs 110.80 to Rs 113.00 in open currency market.
Malik Bostan President Forex Association of Pakistan (FAP) said that although there are multiple reasons of uncertainty in the open currency market, the chief reason is SBP''s restriction of 35 percent cash import of dollar against export of permissible foreign currencies. He said that following the SBP''s directives, now the exchange companies are importing 65 percent of dollar through banking channel, which mainly takes two days for delivery of imported greenback.
However, he said that, SBP on Monday has assured supply of dollar, being imported through banking channel, on same day to reduce the supply and demand gap. "On Monday, we have approached Muhammad Ali Malik Senior Executive Director Foreign Exchange Policy SBP on the rising dollar-Pak Rupee rate disparity in open currency and interbank market and he has assured to resolve the issue," Bostan said.
He said that SBP''s senior official, after talking with banks, replied over the phone and informed that SBP has asked banks for same-day payment of imported dollar to the Exchange Companies to enhance supply and restrain the rising dollar rate in open currency market. He said that after SBP''s directives, some banks have also contacted exchange companies and assured them of cooperation.
"We are hopeful that from Tuesday, with sufficient dollar supply, situation will improve and dollar against the Pak Rupee will be weakening in the open currency market," he added. Besides, SBP''s 35 percent cash import restriction, ongoing political uncertainty in the country mainly caused by Balochistan situation and US President''s threat have created some panic in the market, resulting in higher demand of greenback. Zafar Paracha Secretary General Exchange Association of Pakistan (ECAP) also criticized the SBP''s move.
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