KARACHI: The Exchange Companies Association of Pakistan (ECAP) has advised the government to “fix” the dollar rate to reduce volatility in the currency market as the country faces a severe economic crisis amid dwindling foreign exchange reserves. suffering from
“It is advisable to fix the rupee/dollar exchange rate for export import bills and remittances,” ECAP General Secretary Zafar Paracha said in a statement on Monday. He added that these remittances can be received through banks and money changers at a fixed rate of 240 per dollar.
The local currency ended at 228.34 per dollar against the previous close of 228.15 in the interbank market. The rupee was trading at 238.75 against the dollar in the open market. It was available at 238.50 on Friday.
The memorandum suggested the government to offer a rate of Rs 240 per dollar for overseas Pakistanis and domestic remittances. He believes that this initiative will help increase remittances, reduce handi/hawala, strengthen the government channel and ultimately eliminate the gray market.
According to Pracha, the dollar rate in the gray market has reached 267/270 against the local unit. This offer can be made for Rs 228 to the dollar for the purpose of earning exporters’ income. And the rate for importers will be based on a weighted average of domestic remittances and exporters’ rates. He explained that this would benefit exporters and remittances.
“This will encourage exporters to bring dollars into the country, increase foreign exchange reserves and strengthen the remittance sector of exchange firms.”
Remittances from Pakistanis working abroad fell 19 percent to $2.0 billion in December.
During the first six months (July to December) of the current fiscal year, the nation received $14.1 billion in remittances, a decline of 11.1 percent from a year ago.
Pakistan’s foreign exchange reserves held by the State Bank of Pakistan fell by $1.2 billion to $4.3 billion as of January 6 – barely enough to cover three weeks of imports.
The country is currently facing a balance of payments crisis due to large foreign debt repayments and lack of external finance, which has severely depleted Pakistan’s foreign reserves and created a persistent dollar shortage. has gone
The government has restricted many imports to save dollars and some businesses have closed due to the inability to import machinery or parts.
