Exchange Companies Association of Pakistan (ECAP) on Tuesday welcomed the State Bank of Pakistan's decision to impose maximum spread between the buying and selling rates of foreign currencies in the open market. Talking to Business Recorder, ECAP Chairman Malik Bostan said this step will help reduce the volatility in the exchange market and support the PKR against the dollar.
The SBP on Tuesday asked exchange companies that a maximum spread allowed between the buying and selling rates of foreign currencies must not exceed 25 paisa. Bostan said that panic buying was witnessed on Monday by general public following media reports that resulted in appreciation of the dollar against PKR in open currency market. He added that the dollar trading at 100.10 to the PKR was only temporary. "Only a few "B" category exchange companies quoted or sold dollar over Rs 100, while exchange rate of "A" category companies remained about 99.80," he mentioned.
On Tuesday, "A" category companies supplied dollar to "B" category companies to fulfil their requirements with the result the dollar traded under 100 to the Pak rupee, he added. Bostan said dollars are available in huge quantity in the open currency market and there is no shortage of any currency. The Pak rupee has already gained some 60 paisa on Tuesday and will further gain strength against the dollar, he added.
"We have also decided to take action against the exchange companies involved in the black marketing of the dollar to curb speculation in the currency market," he said. With the imposition of spread, the SBP can now take action against any exchange company, found violating the SBP divertive, he said.