Banks increasing dollar rates; FAP tells Prime Minister

Banks increasing dollar rates; FAP tells Prime Minister

KARACHI: Malik Mohammad Bostan, President, Forex Association of Pakistan (FAP) on Monday informed Prime Minister Shehbaz Sharif that banks are increasing dollars rate.

Prime Minister Shehbaz Shari, in a Zoom meeting with FAP President, expressed concerns of significant devaluation of Pakistan Rupee (PKR) and asked reasons behind the recent fall of rupee against the dollar.

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Bostan explained the reasons for dollar appreciation including high trade deficit, delay of $1 billion IMF loan tranche and huge external debt which are scheduled to pay this year.

FAP President said that until the rate of dollar is not reduced in the interbank the free market may not bring down the exchange rate. He said the exchange companies can control the free market. “If banks bring down dollar rate by Re1 we will appreciate the local currency by Rs2,” he added.

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Bostan informed the prime minister that after his oath taking the rupee appreciated to Rs181 to dollar from Rs189. “However, after political uncertainty and announcement of sit-in in Islamabad put pressure on the exchange rate,” he added.

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Due to uncertainty, importers are opening more Letter of Credit (LCs) and exporters were surrendering less dollars, which have reduced the supply of dollars in the local market, he added.

FAP President suggested that the government should ban import of luxury items, which help in saving around $12 billion annually. “This will help the country to repay external debt without taking more loans,” he added.

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