KARACHI: The State Bank of Pakistan on Tuesday decided that all foreign currency transactions, whether buying or selling of $500 or above through the exchange companies will now require Computerised National Identity Card (CNIC).

The decision has been taken in the wake of mounting pressure on Pakistan with the impending placement of the country on the so-called “grey list” of the Financial Action Task Force (FATF). Earlier, transactions of up to $2500 were allowed without providing a CNIC or any other form of identification.

The identification list included CNIC, National Identity Card for Overseas Pakistanis (NICOP), Pakistan Origin Card (POC), and passport (having valid visa on it or any other proof of legal stay of a foreigner in Pakistan).

The decisions proved a shock for the exchange companies who were trying to convince the central bank that purchasing of dollars (by exchange companies) and other currencies should not be restricted to just $500.

An emergency meeting is expected in the State Bank on Wednesday to discuss the new situation emerging out of the decision which, the exchange companies claim, can negatively impact the exchange rate regime. “We are ready to support the country. Whatever we can do but we have requested the central bank to hear our grievances related to this decision” said Malik Bostan, President Forex Association of Pakistan.

Exchange companies said they should be allowed to purchase dollars without restrictions as were allowed earlier. The buyer of dollars from market should be restricted and identification should be compulsory for them, they said.

“We have a meeting in the State Bank building on Wednesday and hope a better situation will evolve,” Bostan said. The exchange companies believe that with the latest restriction, the illegal traders will attract most of the sellers which could create an constrict the supply of dollars to the open market..

Published in Dawn, May 23rd, 2018