The State Bank of Pakistan (SBP), with the approval of the federal government, has introduced a new scheme for exchange companies under which they will receive an incentive of Re1 for each US dollar of home remittances surrendered in the inter-bank market.
In this regard, they would be required to surrender 100% of home remittances mobilised in the inter-bank market, according to an SBP statement issued on Friday.
The incentive of Re1 for each US dollar surrendered in the inter-bank market “will be fixed irrespective of the exchange rate”.
“However, the incentive will not be allowed to exceed 1% of the exchange rate in case of rupee appreciation,” the statement said.
Earlier, the exchange companies were required to surrender a minimum 15% of home remittances in the inter-bank market.
To implement the new scheme, the SBP has amended its regulation governing the disbursement of inward remittances by exchange companies.
“Now the companies shall surrender 100% of foreign currency received by them on account of inward home remittances, in equivalent of US dollars, in the inter-bank market on the same day,” it said.
The scheme will improve foreign exchange liquidity in the inter-bank market, since exchange companies mobilise a significant amount of home remittances.
Published in The Express Tribune, February 5th, 2022.
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