KARACHI: The State Bank of Pakistan (SBP) on Monday extended the deadline for exchange companies to import half the dollar value of their currency exports, in cash, until the end of FY25 against the previous validity of June 30.

According to an SBP circular, the decision was taken to ensure an adequate supply of US dollars in the open market. The exchange companies can export foreign currencies, barring greenbacks, to Dubai and bring back the entire amount in US dollars through banking channels.

Later, the State Bank allowed half of the forex imports in cash to improve liquidity in the open market for general masses who need foreign exchange to travel abroad for Umrah, health, education and other purposes.

Exchange Companies Association of Pakistan General Secretary Zafar Paracha said the deadline extension would stabilise the open market longer and end the liquidity shortages.

Slow inflows

He said the inflows of remittances were relatively slow in September due to several factors, mainly the uncertainty about the executive board’s approval of the new $7 billion IMF loan.

He said that Pakistan will get approval on Sept 25, which will improve sentiment and lead to more stability. He said thousands of overseas Pakistanis did not visit the country due to floods and rains, causing a lower supply of foreign currencies in the open market.

He said the exchange companies sold $300 million to banks in August compared to the current month’s $150m so far. Overseas Pakistanis sent 44pc more remittances in the first two months of FY25. They remitted $2.994bn in July and $2.942bn in August.

Published in Dawn, September 24th, 2024