KARACHI, May 8: State Bank of Pakistan Governor Dr Shamshad Akhtar has directed the exchange companies to keep dollar-rupee parity differential between the inter-bank and kerb markets at rational levels, restrain from speculation and focus on bringing in home remittances into the country.

“This differential should not be beyond normal trends seen in the past,” she told heads of exchange companies while referring to recent speculative trends in the kerb market.

In response, the exchange companies representatives gave a firm commitment to the governor that they will ensure that dollar-rupee parity differential between the inter-bank and kerb market comes down to normal levels within a week.

They also assured their cooperation to work with the central bank, says an SBP press release.

Dr Akhtar said instead of curbing speculative trends, some exchange companies are playing a role in the speculation that is totally unacceptable.

“You should not be led by speculation…it is the time to serve the country and not to mint money through irregularities,” she added.

The SBP governor said the whole idea behind setting up exchange companies was that these companies would play a pivotal role in attracting home remittances and in curbing activities of illegal operators. But, she added, it has been noted that some exchange companies are themselves indulging in illegal activities.

“Any evidence obtained against any exchange company would be sufficient to suspend or cancel the licence of that company,” she warned.

The SBP governor further stressed upon the exchange companies to focus on bringing in more and more home remittances and added that “this should be the primary target of the exchange companies.”

She said in 2006 the State Bank had made it clear that no remittance on account of trade transactions would be undertaken by exchange companies.

However, it has been observed that a number of remittances are being reportedly made for trade settlement directly or indirectly.

“SBP has taken a very serious view of it and we are going to take action against companies involved in these transactions and also in other irregularities,” she added.

The SBP governor announced that the blueprint of reforms is being introduced in the exchange company sector with a view to define more clearly the objectives and scope of these companies.