Banks can purchase US dollars from interbank market till end of
the year: SBP
The State Bank of Pakistan (SBP) has issued a circular extending
the deadline for banks to purchase US dollars from the interbank market for
settling card-based cross-border transactions through international payment
schemes. The new deadline is December 31, 2023, whereas the previous guidelines
were valid until July 31, 2023.
This decision by the SBP allows commercial banks to buy US
dollars from the interbank market for transactions made by their clients using
credit cards, alleviating demand-side pressure on exchange companies and
contributing to the stability of the rupee in the open market. Furthermore,
this move is expected to narrow the exchange rate gap between the interbank and
kerb markets.
Prior to the announcement on May 31, 2023, banks were purchasing
an average of $8 to $10 million daily from exchange companies to settle
card-based cross-border transactions involving international payment systems
such as Visa and MasterCard.
For the first time, the IMF has introduced a condition
(structural benchmark) regarding PKR-USD parity to manage the currency in line
with market forces. According to the country report, the average premium
between the interbank and open market rate should not exceed 1.25 percent
during any consecutive 5-business day period. This condition is seen as a
positive step in keeping the currency in line with market forces.
Source: https://www.thenews.com.pk/