Sources said continuous appreciation of the dollar against rupee forced the regulator to swing into action. Resultantly, the SBP summoned a meeting of exchange companies to discuss the exchange rate issue Monday. A high-level meeting of the exchange companies was held at the State Bank head office to review the money market situation amid current depreciation of Pak rupee against the dollar.
The meeting was chaired by SBP Governor Yaseen Anwar and attended by State Minister Saleem Mandviwala, representatives of exchange companies and the SBP officials. During the meeting, issue of exchange rate was discussed in detail and the SBP asked ECs to take some serious measures to control the exchange rate. However, representatives of exchange companies made it clear that ECs are directly not responsible for the decline in PKR value, adding that the dollar rate is being increased because of interbank market, where panic buying is being witnessed followed by forward booking for Letters of Credit (LCs).
"Usually, the open market follows the interbank market and any change in the interbank market will directly affect the open market exchange rate," representatives of the ECs said. Current increase in the open market is also because of interbank market and if the dollar rate will reduce there, open market will follow suit, they said. "There is no shortage of dollar in the open market and even ECs are selling their excess quantity to banks on a daily basis," they said.
Representatives of Exchange Companies alleged that a cartel of some banks is active in the interbank market and involved in bad practices. This cartel can be exposed through closely monitoring the interbank market, they added. They urged the SBP to take steps to stop smuggling of currencies, which are illegally being exported to Dubai. The SBP may request Dubai government for strict checking of official remittances and without SBP''s declaration, currency export should not be allowed, they suggested. During the meeting, the governor SBP and the state minister assured that all the problems faced by exchange companies will be resolved on a priority basis.