Karachi: In an apparent move to allay IMF concerns that the government is manipulating the rupee-dollar exchange rate, Pakistan’s central bank has allowed commercial banks to buy US dollars in the interbank market to They can settle international payments made through their customers’ credit cards.
Speaking to JEE News, Exchange Companies Association of Pakistan General Secretary Zafar Paracha said that the central bank’s move is aimed at narrowing the gap between the inter-bank and open market exchange rates.
He estimated that the difference would reduce to Rs 20-25 in the next two days. “It will immediately shrink to Rs 15-20 on Thursday (June 1).”
Spread widened to Rs 27 on account of a sharp fall of around Rs 20 in the last 10 days due to an all-time low of 312/$ in the open market.
On the other hand, the exchange rate in the interbank market remained stable at around 285/$ during the last two weeks.
The wideness of the spread indicated that the true value of the rupee was what it was in the open market. This led the IMF to recommend that the government “focus on restoring the proper functioning of the foreign exchange market.”
An expert said the other day that the IMF wants to see roughly the same exchange rate across the country’s currency markets.
The rupee fell 0.04 percent or Rs 0.12 to Rs 285.47 against the dollar in the interbank market on Wednesday.
However, at the open market, the currency recovered 0.32%, or Re1, to 311/$. “The nominal correction in the open market has nothing to do with the SBP’s notification, as it was issued after the market closed,” Paracha explained.
He said that the rupee will remain under pressure in the interbank market until the IMF program is revived and new loan packages are announced by friendly countries.
A State Bank of Pakistan (SBP) notice circulating in the market read, “In view of the representations received from the stakeholders, it has been decided that the authorized dealers (commercial banks) will be allowed to issue cards on card basis.” Allow inter-bank purchase of US dollars for settlement. Cross-border transactions with IPS (International Payment Schemes).
“These instructions will be effective immediately till July 31, 2023 unless otherwise notified.”
