SBP to enhance monitoring of foreign exchange operations
- Says it has started inspections of a number of exchange companies and banks since Monday
The State Bank of Pakistan (SBP) announced on Wednesday that it has enhanced the monitoring of foreign exchange operations of domestic currency exchange companies (ECs) and banks after massive volatility was witnessed in the rupee-dollar parity.
It added that a meeting of the Exchange Companies Association of Pakistan (ECAP) has also been called on August 4, 2022.
"In view of the recent volatility in the exchange rate and the difference between the inter-bank rate and the rate offered by Exchange Companies (ECs) and banks to their customers, the SBP has increased the monitoring of the foreign exchange operations of ECs and banks," it said in a statement.
The rupee saw its worst month in over 50 years in July, shedding 14.5% against the US dollar. However, it has been on a gaining spree in the last four sessions with the increase on Wednesday its biggest day-on-day appreciation in absolute terms.
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Meanwhile, the SBP said that it also began inspections of a number of exchange companies and banks from Monday (August 1, 2022) onward.
The central bank added that on Tuesday (August 2, 2022), it suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violating SBP’s regulations.
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“The SBP has also imposed monetary penalties on some ECs in the recent past,” it said. “Besides, due to violations of SBP instructions, arrangements of 13 franchises by six different ECs were terminated in the recent past.”
It added that it has also started conducting mystery shopping exercises throughout Pakistan to investigate the apprehensions that some ECs are not selling foreign currency to their customers.
“If needed, the SBP would augment its enforcement actions on the ECs and the banks in light of findings of the on-going inspections and mystery shopping,” the central bank said.
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