Monday June 27, 2022

Tracking dollars

December 24, 2021

This refers to the State Bank of Pakistan’s (SBP) decision to limit individuals buying foreign exchange to $10,000 per day. One wonders about the effectiveness of this regulation as the set limit is still rather high. At present, open market foreign currency trading is done through forex companies. Some people in these companies often deliberately hoard dollars to make huge profits. Only scheduled banks – and not independent businesses – should be allowed to make forex changes since banks are regularly audited, both internally and externally. This will allow the SBP to exercise better control over the flow of foreign currency.

It the foreign exchange is available at controlled rates to all legitimate consumers at scheduled banks, the hundi-hawala system will also die out as it thrives on the idea that it is cheaper and less tedious than the official method. It also gives people anonymity, which makes things easier for smugglers and criminals.

Khalid Ismail