KARACHI: The State Bank of Pakistan (SBP) on Friday announced an extension of the facility allowing exchange companies to import cash US dollars, up to 50 percent of the value of their export consignments, until June 30, 2024.
The central bank's move aims to bolster the availability of US dollars in the open market. "To guarantee a sufficient supply of US dollars in cash in the open market, the SBP has extended the duration of this facility," the central bank said in a circular. This arrangement was first set to last until December 31, 2023, according to a circular that was published in July of the previous year.
In July, the central bank granted exchange companies permission to import US dollars against the value of their export consignments of permissible foreign currencies within five working days through reputable freight and security agencies.
The agreement was contingent on the exchange company importing no more cash US dollars than 50 percent of the value of its export shipments during the specified period. The import consignment will be verified as per the procedure laid down for the export of foreign currencies. After verification, the consignment shall be packed again, sealed, and handed over to the cargo/security company for onward delivery to the exchange company, the SBP said in the July circular.
“Exchange Companies must ensure compliance with all relevant laws and regulations, including those of the jurisdiction from where US dollar cash is being imported,” it said. “Exchange Companies shall ensure that all transactions related to the import of cash are properly reflected in their books of accounts.”
The Exchange Companies Association of Pakistan (ECAP) Secretary General, Zafar Paracha, said that the SBP made the right decision in extending this facility. “The fact that this arrangement will last until June is a good thing. The shortages in supply in the open market have been promptly remedied by the SBP. This will enhance the market's dollar supply,” Paracha said.
“The exchange companies are still supplying the interbank market with dollars, notwithstanding certain shortages. The exchange companies have sold interbank USD 300–350 million this month.”