KARACHI: Following the directives of the State Bank of Pakistan (SBP), Exchange Companies Association of Pakistan (ECAP) has adopted the new mechanism for issuance of exchange rate of six major currencies.
Previously, two different closing rates were being issued at the closing of the business hours of open currency market. One exchange rate list was being issued by the ECAP and another by the Forex Association of Pakistan (FAP) for six major currencies, ie, US dollar (USD), euro, pound sterling (GBP), Japanese yen (JPY), UAE dirham (AED) and Saudi riyal (SAR).
However, on Dec 22, the SBP devised the mechanism for compiling of open market exchange rates of select foreign currencies aimed to ensure transparency and credibility in the open currency market. The SBP directed the ECAP to implement the new exchange rate compiling mechanism by December 26, 2023.
Open market: SBP unveils new exchange rate mechanism
As per the SBP’s directives, 12 contributing Exchange Companies including Pakistan Currency, Ravi, Link International, Dollar East, Wall Street, Habib Qatar International, Sadiq, Zee Que, Paragon, HBL, AA and Sky Exchange Company are submitting the closing rates (buying and selling) for six major at ECAP’s dedicated email and after compiling, ECAP is issuing a single rate of the six selected leading currencies.
“We have fully adopted new exchange rate mechanism for compiling of six currencies and the process is very simple and transparent”, said Zafar Paracha, General Secretary ECAP. He said that all exchange companies are on board and supporting to make this new exchange rate mechanism successful.
As per the SBP directives, after compilation of data, the average {buying and selling) rates of six leading currencies will be disseminated by the ECAP to stakeholders by 5:00 PM, however the exchange rate was issued at 6:00 PM on Wednesday.
Paracha has said that as the for the first time a proper mechanism has been adopted for exchange rate therefore, there was some delay in the release. Once the exchange companies become familiar, rates will be released timely, he added.
Copyright Business Recorder, 2023
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