PKR gains around 2 rupees against USD

October 19, 2023 (MLN): The Pakistani rupee (PKR) rebounded during early trade, recovering approximately 2 rupees [09:51am PST] after experiencing a 3.25 rupee depreciation against the US Dollar yesterday.

The local unit was quoted at PKR 278.43/279.03 [09:51am PST] with the trades being reported at 277.98 per USD.

While in the open market, PKR is being traded at 280/283 per USD.

Yesterday, Syed Shabbar Zaidi, ex-chairman of the Federal Board of Revenue in a post on X (formerly Twitter) termed the US dollar hike as ‘artificial’, urging the authorities to take immediate action.

“Names of all persons buying from Exchange Companies regularly & frequently to be communicated to State Bank & FBR. Exchange Company’s sale of Dollar to be inspected daily by State Bank staff. Intelligence agencies to be activated.” he added.

To note, the local currency had maintained a winning-streak for 28 consecutive sessions amid the ongoing army-backed crackdown to restrict illegal dollar outflows, along with other administrative measures implemented by the government.

Moreover, reforms introduced by the State Bank of Pakistan (SBP) to consolidate and transform various types of exchange companies into a single category with a well-defined mandate and higher capital requirements are enhanced transparency.

It is worth noting that the SBP suspended the authorization of five exchange companies of B- Category last week, underscoring the central bank’s commitment to ensuring compliance with regulatory standards.

This comes in addition to the suspension of four exchange companies in the previous month.

These reforms also apply to the banks actively engaged in foreign exchange business, mandating them to set up wholly owned ECs to address the legitimate foreign exchange needs of the general public.

Following the guidelines of the central bank, certain banks such as; Habib Metropolitation Bank (PSX: HMB), Bank Al Falah Limited (BAFL), Faysal Bank Limited (PSX: FABL),  Allied Bank Limited (PSX: ABL), Bank Al Habib Limited (PSX: BAHL), MCB Bank Limited (PSX: MCB), Meezan Bank Limited (PSX: MEBL), and United Bank Limited (PSX: UBL), have decided to establish their own exchange company.

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