Pakistan allows banks to buy US dollars for international payments.
The central bank’s action, according to Exchange Companies Association of Pakistan General Secretary Zafar Paracha in an interview with news reporters, aims to close the gap between exchange rates on inter-bank and open markets.
Over the coming days, the margin would close by 20 to 25 rupees, he said. On Thursday, June 1, it will decrease right away by Rs.15–20.
Due to a significant depreciation of about Rs20 over the last 10 days to an all-time low of Rs312/$ on the open market, the spread increased to a record Rs27.
On the other hand, for the past few weeks, the exchange rate in the interbank market stayed stable at around Rs285/$.
The increasing spread indicated that the open market rate for the rupee was the one that was actually in effect. It was because of this that the IMF advised the government to “focus on restoration of proper foreign exchange market functioning.”
An expert recently stated that the IMF desired to see nearly identical exchange rates across all domestic currency markets.
In the Wednesday interbank market, the rupee fell 0.04%, or Rs0.12, to Rs285.47 against the dollar.
But on the open market, the exchange rate increased 0.32%, or Re1, to Rs311/$. The SBP notification had no bearing on the nominal correction in the open market because it was released after the market had closed, Paracha explained.
He stated that until the IMF plan was restarted and friendly nations announced fresh loan packages, the rupee would continue to be under pressure in the interbank market.
Unless otherwise stated, these instructions are effective immediately and last until July 31, 2023.
