KARACHI: The State Bank of Pakistan (SBP) extended on Monday the deadline for exchange companies to import cash equivalent to half of the dollar value of their currency exports, from June 30 to the end of FY25.
The choice was made, per an SBP circular, to guarantee a sufficient supply of US dollars on the open market. With the exception of US dollars, exchange companies are able to export foreign currencies to Dubai and retrieve the full amount in US dollars via banking channels.
Subsequently, in order to increase open market liquidity for the general public that need foreign exchange for travel abroad for Umrah, health, education, and other reasons, the State Bank permitted half of the forex imports in cash.
The deadline extension, according to Exchange Companies Association of Pakistan General Secretary Zafar Paracha, will prolong market stabilization and put an end to the liquidity constraints.
gradual influx
He said that a number of reasons, chief among them the uncertainty surrounding the executive board’s approval of the fresh $7 billion IMF loan, contributed to the comparatively weak remittance inflows in September.
According to him, Pakistan will receive permission on September 25. This will boost confidence and promote more stability. According to him, floods and rains prevented thousands of Pakistanis living abroad from traveling to their homeland, which reduced the amount of foreign exchange available on the open market.
According to him, the exchange companies sold banks $300 million in August as opposed to $150 million so far this month. In the first two months of FY25, remittances from Pakistanis living abroad increased by 44%. In July, they sent $2.994 billion, and in August, $2.942 billion.
