On Thursday, August 04, 2022, the State Bank of Pakistan (SBP) disclosed the foreign exchange rates for customers, offering valuable information on the buying and selling prices of various currencies against the Pakistani Rupee (PKR).
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FPCCI demands SBP to check speculative dollar trading
KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Wednesday demanded the State Bank of Pakistan (SBP) to check speculative dollar trading.
FPCCI President Irfan Iqbal Sheikh at a meeting with high level delegation of the SBP visited the Federation House, urged the central bank to use policy tool to check the speculative dollar trading over the past few weeks.
READ MORE: FPCCI warns factories closure as rupee crashes against dollar
The senior management of the SBP led by Governor (A) Dr. Murtaza Syed and comprising, among others, Deputy Governors Dr. Inayat Hussain and Ms. Sima Kamil visited the FPCCI to discuss current economic challenges and the measures being taken by the Government and SBP.
President FPCCI Mr. Irfan Iqbal Sheikh in his inaugural remarks welcomed Dr. Syed and the senior management of the central bank for their visit to the FPCCI.
Shedding light on current business scenario from FPCCI perspective, he requested the Governor (A) to use policy tools available at the central bank’s disposal to check the speculative dollar trading over the past few weeks.
He observed that importers, manufacturers and industries were at the receiving end due to speculative nature & unavailability of dollars, shortage of industrial raw materials and the resultant disruptions in the production processes.
READ MORE: Foreign investors discuss economic situation with SBP
Irfan maintained that over the past several weeks the commercial banks have been offering LCs to importers at the rates higher than inter-bank rates and requested the SBP to play its role for course correction.
Dr. Murtaza Syed, Governor (A) State Bank of Pakistan (SBP) has announced the formation of a committee and appointment of an SBP liaison officer for close coordination with the FPCCI and timely redressal of grievances of business committee. He made this announcement during his visit to the FPCCI on the invitation of their management.
The Governor (A) appreciated business community for their endurance in facing the challenges posed by both international and domestic events and ensured that SBP will provide them its full support by addressing their concerns as much as possible.
The Governor (A) in his address apprised the audience that staff-level IMF agreement is already in place and the board-level approval is expected in the third week of August as their board will meet after their vacations in the first-half of August are over.
READ MORE: SBP introduces foreign currency, rupee value business accounts
He added that SBP believes that rupee is undervalued at the moment and dollar has overshot in the forex market due to several reasons; however, he hoped that it will come down to its real value in 2 – 3 months. He invited the business community to sit together with the SBP for a constructive consultative process and give suggestions on prevailing economic situation, foreign exchange and other related issues.
Dr. Syed also assured the participants to look into technical requirement of prior approvals required by the commercial banks from SBP on the clearance of financial documents of the consignments with the H.S. Codes starting with 84 & 85 as these restrictions were affecting the import of tractor parts and other agricultural machinery as well.
A senior SBP official highlighted the support extended to the businesses in general and to the exporters in particular. SBP enhanced short term Export Refinance limits from Rs432 billion to Rs857 billion in just last four years reflecting an increase of almost 100 per cent. Likewise, outstanding stock of SBP’s long term fixed rate financing for the exporters (LTFF) has also witnessed an increase from Rs209 billion to Rs329 billion in last three years reflecting 57 per cent growth.
The Federation acknowledged that Temporary Economic Refinance Facility (TERF) massively helped in stimulating investment and boosting economy in the backdrop of COVID-19. It will not be out of context to mention that most of the business entities availed TERF at rates far below than the maximum cap of 5 per cent.
READ MORE: OICCI suggests duty cut on locally manufactured cars
The overwhelming success of TERF indicated that it was successful in filling the gap for long term investment in the country. An amount of Rs436 billion had been approved under this facility for 628 businesses.
The FPCCI members raised certain questions which were comprehensively answered by the senior SBP management during the meeting and ensured the FPCCI members that the senior management of the central bank was always available to listen to their issues and resolve them on priority. On a question regarding expiry of SBP’s Refinance Facility for Renewable Energy, the Federation was informed that the scheme has been extended till June 2024.
In the end, the President FPCCI submitted some suggestions for consideration of the SBP. The Governor (A) assured to look into the merits of these suggestions and take a decision soon.
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Bank holidays for Ashura announced
KARACHI: The State Bank of Pakistan (SBP) on Wednesday announced bank holidays on August 08 and August 09, 2021 on occasion of Ashura.
The central bank issued a circular and informed the presidents and chief executives of all banks, Development Financial Institutes (DFIs) and Microfinance Banks (MFBs) that the SBP would remain closed on 8th and 9th August, 2022 (Monday and Tuesday) being 9th and 10th Muharram-ul-Haram, 1444 A.H. on the occasion of Ashura.
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SBP launches crackdown against exchange companies
KARACHI: The State Bank of Pakistan (SBP) has launched crackdown against exchange companies in order to end volatility in rupee value against the US dollar.
A statement issued on Wednesday, the central bank said in view of recent volatility in the exchange rate and the difference between the interbank rate and the rate offered by Exchange Companies (ECs) and banks to their customers, it had increased the monitoring of the foreign exchange operations of ECs and banks.
READ MORE: Pakistani Rupee makes historic recovery; dollar ends at Rs228.80
In this respect, SBP started inspections of a number of exchange companies and banks since Monday (August 1, 2022).
On Tuesday (August 2, 2022) SBP suspended the operations of four branches of two ECs (Galaxy Exchange Co and Al-Hameed International Money Exchange Co) for violation of SBP regulations.
READ MORE: UBL declares 21% decline in half year net profit
SBP has also imposed monetary penalties on some ECs in the recent past. Besides, due to violations of SBP instructions, arrangements of 13 franchises have been terminated by six different ECs in the recent past.
SBP has also started conducting mystery shopping exercise throughout Pakistan to investigate the apprehensions that some ECs are not selling foreign currency to their customers.
READ MORE: SBP introduces foreign currency, rupee value business accounts
A meeting of the Exchange Companies Association of Pakistan has also been called on August 4, 2022.
If needed, SBP would augment its enforcement actions on the ECs and the banks in light of findings of the on-going inspections and mystery shopping.
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SBP issues KIBOR rates – August 03, 2022
KARACHI: State Bank of Pakistan (SBP) on Wednesday issued the Karachi Interbank Offered Rates (KIBOR) as on August 03, 2022.
Following are the latest KIBOR rates:
Tenor BID OFFER 1 – Week 14.64 15.14 2 – Week 14.74 15.24 1 – Month 14.86 15.36 3 – Month 15.54 15.79 6 – Month 15.64 15.89 9 – Month 15.69 16.19 1 – Year 15.73 16.23 -
SBP’s customer forex rates – August 03, 2022
On Wednesday, August 03, 2022, the State Bank of Pakistan (SBP) released the foreign exchange rates for customers, shedding light on the buying and selling prices of various currencies against the Pakistani Rupee (PKR).
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Foreign investors discuss economic situation with SBP
KARACHI: Foreign investors operating in the country have discussed ongoing economic situation with the State Bank of Pakistan, a statement said on Tuesday.
The members of Overseas Investment Chamber of Commerce and Industry (OICCI), the body representing foreign investors and multinational companies in Pakistan, met with Dr. Murtaza Syed, Acting Governor, State Bank of Pakistan (SBP), Dr. Inayat Hussain, Deputy Governor, SBP and Sima Kamil, Deputy Governor, SBP for a discussion on urgent fiscal and monetary policy measures that need to be taken to help stabilize Pakistan’s economy.
READ MORE: SBP introduces foreign currency, rupee value business accounts
Ghias Khan, President OICCI and Abdul Aleem, Secretary General, OICCI led the discussions and raised member concerns related to the pre-approval procedure of LCs for import of machinery and spare parts, timely remittance payments, approval exemptions of shipping values being too low, and other operational issues. It was stressed upon the SBP leadership to set timelines so that industry supply chain is not compromised.
The SBP team gave a comprehensive overview of the current economic situation and the planned strategy to tackle issues in 2023. Pakistan is primarily a consumer-driven economy with consumption driving up to 95 per cent of the GDP. The SBP team was confident that Pakistan’s problems were temporary and urged the OICCI members to work on improving exports to help balance the exchange rate fluctuations and currency depreciation.
READ MORE: Rupee makes recovery against dollar for 3rd straight day
Ghias Khan stated: “This meeting was a much needed first step towards the recovery of Pakistan’s economy. It is imperative that we implement cogent measures to halt our pattern of circular debt. The SBP has always played a critical role in stabilizing Pakistan’s economy, and I am confident that under Dr. Murtaza Syed’s leadership we will be able to withstand the current economic climate while charting a path for growth.”
READ MORE: OICCI suggests duty cut on locally manufactured cars
Dr. Murtaza Syed commented, “SBP is taking tough measures and making difficult decisions to help avert the economic crisis. Global inflationary pressures coupled with a procyclical expansionary fiscal policy during a pro-cyclical period is one of the main reasons Pakistan is at this crossroads today. Once these measures are implemented and the IMF loan is received, the pressures on the economy will ease, specifically with regards to the depreciating Rupee.”
OICCI serves as a platform to promote foreign investments and plays a major role in the growth of commerce and industry in the country. Collectively, OICCI invested USD 2.4 billion last year, contributing one-third of the country’s total tax collections.
READ MORE: Return filing be made mandatory for account holders
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SBP issues KIBOR rates – August 02, 2022
KARACHI: State Bank of Pakistan (SBP) on Tuesday issued the Karachi Interbank Offered Rates (KIBOR) as on August 02, 2022.
Following are the latest KIBOR rates:
Tenor BID OFFER 1 – Week 14.74 15.24 2 – Week 14.80 15.30 1 – Month 14.89 15.39 3 – Month 15.53 15.78 6 – Month 15.63 15.88 9 – Month 15.67 16.17 1 – Year 15.71 16.21 -
SBP imposes Rs85 million as penalty on JS Bank
KARACHI: The State Bank of Pakistan (SBP) has imposed a monetary penalty of Rs85 million on JS Bank Limited for violating regulatory instructions.
The central bank said that JS Bank Limited had violated regulatory instructions pertaining to Customer Due Diligence (CDD) / Know Your Customer (KYC), Asset Quality, foreign exchange and general banking operations.
READ MORE: SBP introduces foreign currency, rupee value business accounts
The SBP directed the bank to strengthen its controls/processes in the identified areas.
The central bank on Tuesday issued details of enforcement actions against banks during the quarter ended June 30, 2022.
The SBP imposed a total amount of Rs131.42 million on three banks during the quarter.
An amount of Rs29.03 million as penalty has been imposed on Habib Bank Limited for violating regulatory instructions pertaining to CDD/KYC. The SBP also directed Habib Bank to strengthen its controls / processes in the identified areas.
READ MORE: Pakistani rupee overshoots temporarily: FinMin, SBP
Furthermore, the SBP imposed an amount of Rs17.24 million as penalty on the Bank of Punjab for violating regulatory instructions pertaining to Asset Quality and CDD/KYC. In addition to penal action, the bank has been advised to strengthen its controls / processes in the identified areas.
The SBP from July 2019 started public disclosure of penal action against banks. “Enforcement actions are an integral part of the regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time,” according to a circular issued by the central bank.
In order to bring more transparency and strengthen market discipline, SBP has decided to publicly disclose significant enforcement actions.
READ MORE: Rupee fall to continue till IMF fund realization: Pakistan’s top bank
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SBP’s customer forex rates – August 02, 2022
On Tuesday, August 02, 2022, the State Bank of Pakistan (SBP) published the foreign exchange rates for customers, offering insights into the buying and selling prices of various currencies against the Pakistani Rupee (PKR).
(more…)