KARACHI: Exchange Companies Association of Pakistan (ECAP) has appreciated the State Bank of Pakistan’s efforts for stability of exchange rate and announcement of mechanism for calculation of open market exchange rates of select foreign currencies.
Zafar Paracha, General Secretary ECAP hoped that this measure will bring further transparency and authenticity in the open currency market exchange rate of foreign currencies. He said that SBP’s reforms for the Exchange Companies and exchange rate are remarkable and ECAP fully supports these measures.
The SBP on Friday has announced the mechanism to issue/publish end of the day daily open market exchange rates published by Exchange Companies Association of Pakistan (ECAP) for six major currencies, ie, USD dollar (USD), euro, pound sterling (GBP), Japanese yen (JPY), UAE dirham (AED) and Saudi riyal (SAR).
Open market: SBP unveils new exchange rate mechanism
Paracha said that Exchange Companies are fully supporting the SBP for stability in the currency market. “As the SBP has advised the ECAP to implement this mechanism for calculation of day open market exchange rates by December 26, 2023, all Exchange Companies will implement it from Tuesday (Dec 26),” he added.
He mentioned that as per mechanism, SBP has selected/ notified 12 top Exchange Companies that have major market share to provide exchange rates of six major currencies including USD, EUR, GBP, JPV, AED and SAR to release the rate on a daily basis.
“We were already adopting this practice to provide an actual rate of the selected currencies, however, now with the announcement of this mechanism by the SBP this practice will be implemented strictly and officially”, he said.
Paracha said as per mechanism, the contributing ECs will submit the rates (buying and selling) for six major currencies that include USD, EUR, GBP, JPV, AED and SAR prevailing in the market to ECAP’s dedicated email between 4:00PM to 4:30PM and the contributing Exchange Company will be required to quote the closing levels to ECAP; and not averages for the day or stale rates.
He said that now the ECAP role has become more important as it will be responsible for ensuring the accuracy of the published data.
Copyright Business Recorder, 2023