SBP asks ECAP to oversee implementation of newly introduced mechanism for end-of-day exchange rates

December 22, 2023 (MLN): The State Bank of Pakistan (SBP) has rolled out a directive instructing the Exchange Companies Association of Pakistan (ECAP) to institute an inclusive mechanism for the calculation and publication of end-of-day open market exchange rates with effect from December 26, 2023.

In a letter sent to Mr Zafar Sultan Paracha, General Secretary of the ECAP, the SBP underlined that this new protocol stipulates that Exchange Companies (ECs) holding a substantial 75% market share will be designated to furnish daily exchange rates for six major currencies— USD, EUR, GBP, JPY, AED, and SAR—to ECAP.

To ensure a representative rate, a minimum of eight ECs must contribute their data, with ECAP guaranteeing the requisite number of contributors.

Participating ECs are mandated to submit buying and selling rates for the specified currencies prevailing in the market to ECAP via a dedicated email channel between 4:00 PM and 4:30 PM daily.

Any failure to provide rates for five business days in a month necessitates a justification to SBP through ECAP, the letter added.

In the event of a contributing EC's license suspension or cancellation, SBP retains the authority to nominate a replacement according to market share distribution.

ECAP will compute the simple average buying and selling rates for each currency from the submitted data and disseminate these rates to stakeholders by 5:00 PM after compilation.

The responsibility for data collection, calculation, and dissemination will be designated by ECAP to its office bearers, ensuring that no other ECs release end-of-day exchange rates under ECAP's name.

All ECs will use the mid-rate of ECAP's published end-of-day rates for revaluation purposes, including regulatory exposure calculations.

The letter further highlighted that ECAP will bear the responsibility for ensuring the accuracy of the disseminated data.

The list of nominated ECs for the upcoming calendar year encompasses:

• Pakistan Currency Exchange Company (Pvt.) Limited
• Ravi Exchange Company (Pvt.) Limited
• Link International Exchange Company (Pvt.) Limited
• Dollar East Exchange Company (Pvt.) Limited
• Wallstreet Exchange Company (Pvt.) Limited
• Habib Qatar International Exchange Pakistan (Pvt.) Limited
• Sadiq Exchange Company (Pvt.) Limited
• ZeeQue Exchange Company (Pvt.) Limited
• Paragon Exchange Company (Pvt.) Limited
• HBL Currency Exchange (Pvt.) Limited
• AA Exchange Company (Pvt.) Limited
• Sky Exchange Company (Pvt.) Limited

Copyright Mettis Link News