State Bank of Pakistan (SBP) has allowed the Exchange Companies (EC) to export American dollars on a consignment basis through cargo or Security companies and ordered the ECs to keep their incomes within three days in the accounts with Banks in Pakistan.
According to Chapter 5 of the Exchange Companies Manual, ECs can export foreign currency except for US dollars. Still, they would keep equivalent dollars in their foreign currency accounts. SBP has allowed exports of the American dollar at the request of the Exchange Companies Association of Pakistan (ECAP) until September 30, 2022, which enables ECs to channel the flow of foreign exchange by their interbank market. SBP has instructed ECs to ensure the availability of US dollar currency at their counters to fulfill the demand of the general public.
According to the SBP, ECs should have to submit 100% of foreign exchange earnings by the export of US dollars in the interbank market on the same day. They must provide data regarding exports and surrendered amounts to the Banking Supervision Department of SBP daily. SBP has warned the EC’S to keep their records for inspection. If they violate, SBP will take action under the Foreign Exchange Regulation ACT, 1947.
Malik Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), said that banks are not purchasing US dollars from ECs and must take prior permission to export US dollars. The functioning of the ECs has stopped for five days due to the previous procedure. They are bearing massive losses due to a depreciation of US dollars. He has thanked the SBP Governor Dr. Murtaza Syed and Deputy Governor Inayat Hussain. He appreciated the SBP’s decision that would narrow down the gap between the interbank and open currency market.
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