Government promises to encourage foreign exchange firms to increase supply of foreign currency
KARACHI: The government was planning to offer an incentive discount to foreign exchange companies to attract remittances from foreign Pakistanis in an effort to boost the country’s dollar supply.
“Finance Minister Shaukat Tarin has promised foreign exchange companies to offer them a refund for inbound remittances according to the similar ratio given by the government to commercial banks,” the Association of Foreign Exchange Companies said on Monday. Pakistan (ECAP) in a statement.
The Minister and the Governor of the Central Bank, Dr Reza Baqir, held a meeting with ECAP officials in Karachi to solicit proposals from the exchange companies to increase currencies and workers’ remittances.
“The minister asked companies to provide as much foreign currency as possible to the government because it urgently needs it,” the statement said.
ECAP chairman Malik Bostan told Tarin that foreign exchange firms have the potential to attract $ 10 billion in remittances per year. âTo do this, the government should announce incentives for these businesses,â Bostan said in the statement.
Bostan said foreign exchange firms provided the government with $ 4.5 billion last year, for a total of $ 13 billion since 2018.
The President of ECAP told the Minister and Governor of the State Bank of Pakistan (SBP) that people have large sums of dollars in their homes and bank lockers. “These dollars were issued before 2013 and now commercial banks no longer buy these old notes from the public or from money changers, or deposit them in foreign currency accounts.”
People are worried because banks will not accept dollars issued until after 2013, he added.
âCurrently, the US central bank accepts these dollars and the foreign exchange companies export them with permission from SBP, but the export process is too long because it takes 20 days to bring the US currency back into the country, which has resulted in the blocking of companies. “Capital,” Bostan explained.
âIf the SBP allows us to export old dollars like other third-party foreign currencies on a daily basis, those dollars can be deposited into bank accounts and people can invest in the rupee after selling those dollars,â he said. declared.
The statement said Minister Tarin appreciated the proposal and asked the central bank governor to allow foreign exchange firms to export old dollars on a daily basis.