May 31, 2023 (MLN): The State Bank of Pakistan (SBP) has allowed Authorized Dealers (ADs) to purchase US dollars from Interbank for settlement of card-based cross-border transactions with International Payment Schemes (IPS) such as Visa, MasterCard, etc, the circular letter issued to all the Presidents and Cheif Executives of all ADs on Wednesday.
These instructions are applicable with immediate effect till July 31, 2023, unless otherwise notified.
Before this notice, all credit settlements were done through open market rates. From now on, credit card settlement will be done from the interbank counter.
Currency experts are of the view that this is the right decision of the central bank at the right time as it will lessen the pressure on the open market.
As a result, the spread between the rates of the interbank and the open market will be diminished.
On Wednesday, the local unit closed the trade at PKR 285.47 per USD in the interbank market while in the open market, the dollar was traded at 310/314.
The transaction volume is expected to alleviate pressure in the open market, without causing any significant disruption in inter-bank market activity.
