Karachi, August 1, 2023 – The State Bank of Pakistan (SBP) announced to extend the settlement of card-based cross-border transactions through interbank for an additional five months.
This move comes after the initial two-month facility, which allowed banks to purchase dollars from the interbank market for settlements with International Payment Schemes (IPSs) such as Visa and MasterCard. The extension aims to continue facilitating smoother transactions for card-based payments with international platforms.
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The initial facility, which was introduced on May 31, 2023, was set to expire on July 31, 2023. However, in response to representations from various stakeholders, the SBP has decided to prolong the validity of this permission until December 31, 2023.
Prior to this provision, authorized dealers were required to purchase USD from exchange companies for the settlement of card-based cross-border transactions with IPSs. Now, with the extension, banks have the option to purchase dollars directly from the interbank market for these payments.
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The SBP believes that this move will help alleviate the demand for dollars in the open currency market. By enabling banks to source the required currency through the interbank market, the pressure on the open market for dollar transactions is expected to reduce, leading to a more stable foreign exchange environment.
Financial experts have lauded the SBP’s decision, citing its potential to ease the burden on businesses and individuals involved in cross-border transactions. The extension provides a longer-term solution and offers a measure of stability to the financial landscape in the country.
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As the five-month extension comes into effect, businesses and consumers can continue to benefit from the simplified and efficient process of card-based transactions with international payment platforms. The SBP’s proactive approach to address stakeholders’ concerns reflects its commitment to supporting the nation’s economy and financial ecosystem.
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