SBP extends date for dollar import by exchange firms
Pakistan's central bank has extended the deadline for import of half of US dollars by exchange companies in physical form against export of other foreign currencies till the end of June 2025, which will help currency dealers maintain better supply of the greenback in the open market.
The announcement apparently helped the Pakistani rupee appreciate by Rs0.02 on a day-on-day basis at Rs280.68 against the greenback in the open market, following no change in its value for three consecutive working days, according to the State Bank of Pakistan (SBP) data released on Monday.
In the inter-bank market, the local currency depreciated by Rs0.03 to Rs278.87/$ compared to Friday's close at the five-and-a-half-month high of Rs278.84/$. It was the rupee's first drop in two weeks, which snapped an eight-day winning streak when the currency gained a cumulative Rs0.86 and touched multi-month highs.
The SBP, in its notification, said that exchange companies were allowed to import US dollars in "cash" up to 50% of the value of their export consignments till June 30, 2025.
Background information suggests the companies are bound to import the remaining 50% US dollars through online banking into their bank accounts in Pakistan and sell them in the inter-bank market.
"In order to ensure adequate supply of cash US dollar in open market, the validity of (the) instructions is hereby extended till June 30, 2025," the notification read.
Earlier, the exchange companies were required to import US dollars almost equivalent to the export of other foreign currencies through online banking and release them in the inter-bank market. This condition created shortage of the greenback in the open market, resulting in a notable depreciation of the rupee.
Market talk suggests that exchange companies have continued to import half of the greenback without any inconvenience in recent months despite expiry of the previous relaxation three months ago on June 30, 2024. The rupee ticked down in the inter-bank market on Monday on the back of talk that the currency had peaked out at current levels and exporters had slowed down the sale of greenback on future counters ahead of the International Monetary Fund's (IMF) executive board meeting for approval of a $7 billion loan programme on Wednesday (September 25).
The capital market stands divided over the outlook of the rupee-dollar exchange rate with some projecting further appreciation of the local currency to some extent while others have the contrary view.