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KARACHI: There are reports that exchange companies (ECs) have surrendered $ 20 million to the interbank market during the last two days as there is no demand in the market, Forex Association of Pakistan Chairman Malik Bostan said.

He said after almost one year, the free market exchange rate has reached below the interbank market due to action taken by the law enforcement agencies against the illegal currency traders.

“All credit goes to Army Chief Asim Muneer, who on the request of the exchange companies, has ordered strict action and set up a task force to control the black marketing and illegal trade of currencies,” he added.

COAS explains to businesspeople SIFC potential

For the past three days, the task force aggressively performed and took action against the illegal business of currencies and a number of culprits have been arrested by the law enforcement agencies, he added.

With this move, ECs have surplus dollars as there are no buyers in the market, he said and added that ECs are surrendering excess dollars to the interbank bank market.

Earlier this week, the rate difference in the interbank and open currency market rose to Rs 20, however, now things are being controlled and exchange rate in interbank and open currency market is on the decline.

“During last two days, ECs have surrendered twenty million dollars to the interbank market, resulting in the interbank exchange rate reduction, reaching Rs 305 from Rs 307,” he maintained.

He said on Thursday, the exchange rate in the open market reduced to Rs 302 to the dollar and there was no buyer in the market.

Bostan said there is need to keep monitoring these elements to avoid such bad practices in future and action should be taken on a permanent basis.

He also appreciated the government efforts to curb the smuggling saying that illegal trade was also a major reason behind volatility in the market.

He said the Special Investment Facilitation Council (SIFC) will also help bring more investment in the country, particularly in the mines and mineral sector. In addition, there are reports that some 20 to 25 billion dollars foreign investment will arrive. With the arrival of these inflows, the exchange rate will further reduce in coming months.

Bostan welcomed the SBP’s reforms for the ECs sector saying that this will help further streamline the exchange companies’ business. “There was a mixture of different exchange companies, now it will be easier for the State Bank to closely monitor the exchange companies’ operations,” he added. The SBP’s reforms will create a competitive atmosphere and promote corporate culture in the sector, he said.

Zafar Paracha, General Secretary, Exchange Companies Association of Pakistan said the Army Chief’s assurance of improvement in the economy has restored the investor confidence.

During the meeting with the business community, the Army Chief discussed all issues including corruption, foreign investment, smuggling, currency market and others.

He said a crackdown has been launched against all smuggling, including commodities and dollars and positive results are coming. The crackdown has reduced the prices of certain commodities besides improving the exchange rate in open currency and interbank markets.

Now, the exchange rate in the open market is less than the interbank and after a long time, the inter-bank rate has decreased by Rs2 as panic selling is not visible in the market, Paracha maintained.

Welcoming the ECs reforms, he said people are hopeful that the dollar will not become expensive again. In addition, exporters have also sold dollars in the market, he added.

Copyright Business Recorder, 2023

Comments

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TidBit Sep 08, 2023 08:42am
Now the army chief is doing enforcement? What has this country become?
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ShanD Sep 08, 2023 10:44am
@TidBit, every bit helps. People like you will complain about anything
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Happy Sep 08, 2023 11:12am
Good to read this. But then what is SBP doing if the balck marketing and illegal hoarding is controlled on intervantion of Army Chief. Serious thought should be given that what we doing. No civilian institution is working on the mandate for which it is established. Governance issues all around. I pray and hope that Pakistan comes out of this mess very soon. InShaAllah.
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Dabeer Razvi Sep 08, 2023 11:22am
Good job. Best wishes and prayers.
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Fazeel Siddiqui (Overseas Pakistani) Sep 08, 2023 11:59am
Another military PR campaign. Praising the defacto ruler for wrong economics decision of forcefully controlling the money exchange business. After sometime you will see money exchangers themselves complaining that in fear no customer is showing up and no sale/buy activity of FC due to undue control of security agencies on market.
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Zia ul Haq Sep 08, 2023 12:21pm
Lets see when car prices will come down like USD
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Pak lover Sep 08, 2023 01:39pm
Military PR UNFORTUNATELY
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Adnan Aziz Sep 08, 2023 02:39pm
All these praises mean the civilian setup has failed to deliver. Why not Martial Law if it can work wonders for the country? Malik Bostan and Zafar Paracha should quit their seats and allow men in uniform to sit in, and so should Governor SBP. Let us see if Army is able to control dozens of mafias active in the country. Let the men in uniform intervene and bring the prices of essential commodities down by controlling smuggling, hoarding and profiteering. You cannot say this is not Army's job. After all army is being praised for actions that is not evenly remotely their job.
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Zia ul Haq Sep 08, 2023 03:47pm
Establishment must look in to sky high prices of vehicles in Pakistan
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TidBit Sep 08, 2023 04:22pm
@ShanD, This is nothing but PR for the army, and you have fallen into its trap.
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Amir Ali Sep 08, 2023 06:09pm
High time to stop and eliminate mafia widen tax net and plz declare Saturday as off day to conserve energy of course enlarge the working hour on rest of the week.arrest the rogue elements in society as they have no political back up currently.
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TidBit Sep 08, 2023 09:58pm
When the army jails the most popular leader of a country, they have to show their relevance. All this is hog wash
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Wiki Sep 09, 2023 02:50pm
Lol You are partner in crime. Now acting like innocent. They are the mafia. These ECs should banned. Banks are their to exchange FC
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