Approximately $1 billion deposited in banks following crackdown
In a sustained effort to combat illegal forex trading and
the smuggling of foreign currency, the Exchange Companies Association of
Pakistan (ECAP) has reported that around $1 billion has been deposited in banks.
Zafar Paracha, General Secretary of ECAP, stated,
"Since the crackdown began in September, we have successfully deposited an
estimated $800 to $900 million in banks, showcasing commendable results."
SBP
introduces incentives to attract more remittances
As a direct consequence of these actions, the daily average
trading volume of exchange companies has surged from $5-$7 million to an
impressive $50 million. Paracha further added, "We are consistently
selling up to $40 million per day to the banks, with an unprecedented influx of
funds from overseas Pakistanis."
Currency dealers have lauded the efficacy of administrative
measures, which have yielded positive outcomes for Pakistan's economy.
Additionally, policy reforms aimed at curbing Afghan transit abuse and the
smuggling of Iranian oil have contributed to the preservation of foreign
exchange reserves.
Remittances channeled through exchange companies have seen a
substantial increase of 10 to 15 percent, with expectations of a corresponding
rise in inflows through banks. Banking sector dealers anticipate that
remittances in September will increase by 25 percent, reaching $2.5 billion
compared to August figures.
State
Bank to penalize banks over higher dollar rates
Meanwhile, the State Bank of Pakistan (SBP) has been
actively purchasing dollars from the interbank market for debt servicing,
although precise figures remain undisclosed. As of September 28, the SBP held
reserves totaling $7.6 billion.
Bankers have observed heightened inflows in the interbank
market due to the daily depreciation of the dollar, prompting exporters to sell
their dollar holdings. They also noted that the SBP is refraining from
intervening in the exchange rate, and import restrictions have curtailed dollar
outflows.
The government's efforts to reduce imports have contributed
to a decline in the current account deficit to $2.4 billion in FY23, down from
$17.5 billion the previous year.
Pakistan's
debt reaches Rs 64 trillion: SBP
In the open market, the dollar depreciated by Re1 to
Rs280.50 on Monday. Dealers reported that sellers have dominated the market,
while buyers are relatively scarce, indicating reduced demand for dollars.
Experts suggest that the reforms in the Afghan Transit
Agreement hold promise for Pakistan's long-term economic stability, as the
agreement has historically been susceptible to exploitation by smugglers on
both sides of the border.
Source: Profit Pakistan