January 24, 2023 (MLN): Exchange Companies (ECs) have decided to remove cap from dollar in open market from tomorrow, Malik Bostan President of Forex Association of Pakistan on Tuesday said.
The government’s imposition of cap on the dollar created a black market. Thus inflows have been reduced from official channels.
He further added, “Dollar shortage also affected people as they needed it for education, travel, and healthcare purpose.”
Currently, ECs are short of dollars, and inflows through worker remittances are not coming into Pakistan, which causes panic in the market and that drives up the dollar rate.
To note, Workers’ remittances dropped by 11.1% YoY to clocked in at $14.1 billion in 1HFY23, while in the month of December alone, the inflows stood at $2bn, decreasing by 20% YoY and 4.7% MoM.
December was the fourth successive month wherein the workers’ remittances recorded a continuous month-on-month decline in inflows mainly due to the increasing spread between official and informal channels.
Decision to allow imports of dollars from other sources also increased rate for Hundi hawala, he noted.
Moreover, he informed the nation that this act will eliminate the black market from the country, as well as the country will see stability in rupee against the dollar.
