The foreign exchange companies have warned that the export of permissible currencies against the dollar may be stopped if flight operations to Dubai remain suspended owing to the coronavirus threat.
The exchange companies expressed serious concerns over the reports of suspension of flights to Dubai and said that they may temporarily discontinue the export of currencies from Pakistan, resulting in the shortage of dollars in the domestic market.
A delegation of the Exchange Companies Association of Pakistan (ECAP), headed by Chairman Malik Bostan, met the State Bank officials at the SBP head office to discuss the recent developments in the currency market.
Foreign exchange companies have sought the State Bank of Pakistan (SBP) support for acquiring US dollars or rupees from banks in exchange for other foreign currencies in case of the government’s decision to suspend flight operations with Dubai amid virus pandemic.
Therefore, the Exchange Companies Association of Pakistan (ECAP) has requested the State Bank of Pakistan (SBP) for permission of sale of currencies to commercial banks to avoid shortage of the greenback in the country and urged them to bound commercial banks to provide them with dollars or rupees in return for other foreign currencies, including Saudi riyal, dirham, pound and euro.
“Daily nearly 10-12 million dollars worth of different currencies, including the Saudi riyal, dirham and pound are being surrendered at exchange companies’ counter and these currencies are being exported to Dubai with permission of the SBP to import dollars,” stated Malik Bostan, chairman of Exchange Companies Association of Pakistan (ECAP).
He added that that the export of these currencies will discontinue if airline operations to Dubai are suspended.
The ECAP has requested the SBP to allow the banks to purchase these currencies from the exchange companies against the dollar and Pakistani Rupee to ensure the continued supply of the greenback in the domestic market otherwise it will make a huge mess in the local market.
Currently, a large number of people are selling foreign currencies due to attractive rates and the additional currencies should be used for building up the country’s foreign exchange reserves, he added.
He said that the SBP officials have assured full support to the exchange companies and asked for a formal request for approval of this proposal.
Bostan termed the dollar appreciation against rupee as a temporary phenomenon. Foreign investors who are offloading investments in six-month treasury bills are currently purchasing dollars, he said. “As soon their dollar buying ends, the rupee will appreciate,” he added.
He further emphasized that people who have dollars should sell and earn a healthy profit. Boston warned that people who buy the greenback now might face some loss in the future.