Forex firms inject $13 billion in nine years

KARACHI: Foreign exchange firms provided $13 billion to the government through commercial banks over the last nine years to stabilise the currency market, an official said on Thursday.

The foreign exchange company’s official said the companies provided one billion dollars to the current government between August and November 2018.

Rupee has lost a quarter of its value against the US dollar during the last year.

Malik Bostan, president of Forex Association of Pakistan said the supply could further be increased if the government is ready to pay two rupees per dollar rebate on inward home remittances.

The government currently pays a rebate of six rupees per dollar to banks on bringing remittances.

Bostan said foreign exchange companies provide foreign currency to the people traveling abroad for any purpose, including Hajj and Umrah, and to those who send it overseas to meet educational or medical expenses of their families.

The foreign exchange companies and money changers sell foreign exchange in ready and spot value dates to banks as counterparty (interbank market) according to foreign exchange manual 2017 issued by the central bank.

Bostan further said the Finance Minister Asad Umar held a meeting with Director General Bashir Memon of the Federal Investigation Agency (FIA) and heads of foreign exchange companies to discuss efforts being made to crack down on illegal money changers and foreign currency smugglers.

FIA’s different teams have been making surprise checking of the foreign exchange outlets for the last two weeks, Bostan told the minister.

“We have no issue with the FIA’s inspecting and checking, but there should be a mechanism under which FIA team could come with the State Bank’s official upon checking of the any of the companies,” he said.

“The companies are doing business in line with the SBP’s strict rules and regulations against money laundering and terror financing.”

Finance minister assured the foreign exchange companies that the government would provide a complete security to the exchange houses that are running their businesses on legal grounds.

Last year, Pakistan was put on the watch list of the Financial Action Task Force upon failure to meet international standards to curb money laundering and terrorist financing.

The country has almost a year now to avert being blacklisted in a review to verify improvement in the country’s anti-money laundering measures.