KARACHI: In order to enhance the foreign inflows, the Exchange Companies Association of Pakistan (ECAP) has suggested a special exchange rate for remittances and export proceeds.

Zafar Paracha, General Secretary ECAP, has said that in the current situation the economic conditions are abnormal and banks are reluctant to open the LCs, of which various imports are pending.

This issue can be resolved through giving special rates to the overseas Pakistanis to bring the situation to normal condition.

ECAP has suggested introducing and setting the special exchange rate of the US Dollar against the Rupee for export-import bills and remittances.

The offer may be 240 rupee per dollar to the overseas Pakistani abroad and for receiving inward remittance through Exchange Companies. It will be helpful to enhance the remittances and lead to reduction of the Hundi/ Hawala, will support the official channel and also will lead to pull out of the grey market, Paracha said.

Pakistan: where formal channels suffer, and ‘grey’ markets prosper

A rate of Rs 228 per dollar may be fixed for export proceeds of the exporters. And the rate for importers would be Rs 234 on weighted average rates of the home remittance and the exporters. This will help to boost the inflows of the exporter and home remittances, he added.

He said that this move will motivate the exporter, overseas Pakistani and exchange companies and de-motivate the Hundi/ Hawala business. The healthy inflows of home remittances and export proceeds will lead to increase the foreign exchange reserves to support the country’s economy.

Paracha said that Pakistani banks are reluctant and refuse to open the LCs for which various sectors and industries are facing problems and badly affected.

In this connection the exchange companies feel their national responsibility and decided to reduce the burden to the government and intended to help out by providing USD 50,000/- as ECAP is providing for Credit Card Settlement, Education, Medical and travelling, Ziarat, Hajj & Umrah, he added.

Copyright Business Recorder, 2023