SBP helps propel rupee

RECORDER REPORT

KARACHI: The State Bank of Pakistan’s efforts aimed at arresting the slide of Pak rupee bore fruit on Wednesday when Pak rupee showed some recovery against the US dollar as the parity remained range-bound between Rs97.75 and 97.80 to a dollar.

The rupee also gained strength on the kerb where it was available at Rs98.60 for purchase and at Rs98.80 for sale to a dollar as it improved its parity on the inter-bank market.

Minister of State for Finance Salim Mandviwalla chaired at SBP a meeting between SBP’s forex wing and representatives licensed exchange companies – who continued to complain about the step-motherly treatment meted out to them as compared to the banking companies.

This litany of complaints ranges from non-issuance of permission to open more branches and non-approval of agreements with foreign institutions dealing in remittances.

SBP insists on arrangements with licensed institutions only as it feels that this has been a key component in growth of home remittances under the Pakistan Remittance Initiative (PRI) scheme.

Exchange companies want SBP to allow them more flexibility to bring in dollars into the country whereas the central bank feels doing this could result in a slowdown in growth of home remittances which have become a vital and permanent source of helping in keeping the current account deficit within control.

SBP is confident that it would have its reserves above eight billion dollars on June 30, 2013 – equivalent to six weeks of imports and there should be no crisis as such it is not in a rush to seek external help from the International Monetary Fund.