KARACHI: Exchange companies are trading at multiple rates without any uniformity in buying and selling rates of foreign currencies in the open currency market, it was observed on Wednesday.

Thousands of overseas Pakistanis, especially from the Middle East, are currently in Pakistan to celebrate Eid with their families. These Pakistanis use to bring foreign currencies with them and sell in the open market.

The exchange companies were found exploiting this situation as there is no restriction on them to follow the market rate, and no rate is fixed for the day.

When asked about the rate of Saudi Riyal, the exchange companies offered different rates that reflected a situation which gives them a free hand to exploit overseas Pakistanis.

The buying rate varied from Rs22.60 per Saudi Riyal to Rs22.20. The lowest rate was offered by Money Master, an exchange company at Gulshan-i-Iqbal. Others, like Mars exchange company and Al-Rahim Exchange Company, offered Rs22.35 to Rs22.40, respectively.However, when contacted Galaxy exchange company on I I Chundrigar Road, offered Rs22.60 as buying rate.

The vast difference of up to 40 paisa per SR is clearly an exploitation of overseas Pakistanis who supported the country to build its foreign exchange reserves with their hard-earned money.

When contacted, the Forex Association of Pakistan termed it unjustified and said most of the B-category companies were involved in this kind of exploitation.

“This is unfair that exchange companies have been earning too much from overseas Pakistanis,” said Malik Bostan, President, Forex Association of Pakistan.

He said it was an exploitation and violation of market practices, but said there is no law to hold an exchange company accountable for buying a foreign currency at a much cheaper price than the market rate.

An overseas Pakistani said he sent Saudi Riyal at the rate of Rs23 through banking channel just before Eid, but the open market bought his SR at Rs22.20 just after Eid.

Many Pakistanis were found arguing with exchange companies that they got much better prices of Dirham, SR and US dollars through banking channels.

These exchange companies are regulated by the State Bank and were given licence to operate under the guidelines issued by the SBP.

The SBP did interfere in the open market when exchange companies were raising US dollar prices exploiting shortage of the currency. The exchange companies were warned verbally to remain within a limit set by the SBP.

The market does not open with a fix rate of any of the foreign currency. It continues to vary during working hours which allows an exchange company to exploit rate variations for its own benefit.