State Bank to provide dollars to money exchangers, scheduled banks

Published: December 2, 2013
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ISLAMABAD: To stabilise the dollar exchange rate against Pakistani rupee, the State Bank of Pakistan (SBP) will provide money exchange companies and scheduled banks with a large sum of dollars, Express News reported on Monday.

The move comes as a result of orders from Finance Minister Ishaq Dar, who had asked the SBP to address the issue of frequently fluctuating dollar rates.

The country has witnessed a steep rise in dollar rates vis-a-vis the rupee, with the dollar moving from Rs99.58 at the start of the current fiscal year to around Rs108 at present.

The increase in dollar rate makes imports, repayment of foreign loans and interest payments more expensive.

The country’s official foreign exchange reserves had plunged to $3.463 billion on November 22, the lowest level in almost 12 years.

Pakistan has recently made another payment of $396 million to the IMF on November 26, which have brought the reserves even below the $3 billion mark.

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Reader Comments (3)

  • Np
    Dec 2, 2013 - 1:42PM

    So with SBP reserves less than 3 billion dollars which is less than 1 months imports, ow exactly will SBP provide ‘large sum of dollars’ to forex companies as directed by Ishaq Dar?

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  • AR
    Dec 2, 2013 - 3:13PM

    These problems are not caused because exchange companies and commercial banks have low reserves; in fact, they cumulatively hold more forex reserves than the State Bank itself. The problem is that more dollars are going out of the country (both legally and illegally) than they are coming in.

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  • Dec 2, 2013 - 4:43PM

    @AR you missed the main reason for depleting reserves – yup! Trade Deficit (Oil imports)

    Can someone plz inform the State Bank that this is not a repo market and that money exchanges arent the primary dealers? Stop propping up the Rupee. SBP knew it 2 yrs ago this mess’s coming. The mess’s here.Recommend

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