Exchange companies have proposed that the government raise US dollar rates for remittances in order to reduce currency price movements and boost remittances.
The general secretary of the Exchange Companies Association of Pakistan (ECAP) Zafar Paracha said in a statement on Monday, “It is advised to fix the rupee/dollar exchange rate for export-import bills and remittances”. He further said these remittance proceeds could be received by banks and money changers at a fixed rate of 240 per dollar.
The ECAP secretary said the dollar rates could be offered at Rs. 240 per dollar for overseas Pakistanis and those getting inward remittances. He opined that it would significantly boost remittances, mitigate Hundi/Hawala, solidify the official channel, and eventually remove the grey market.
Paracha explained that the grey market rate has reached 267/270 versus the dollar. Spot offers could be made at 228 rupees to the dollar in order to obtain the exporters’ proceeds, while the importer rate would be based on a weighted average of the home remittance and exporter rates. He said that it would benefit exporters and remittances.
Paracha was of the view that this will encourage exporters to bring dollars into the country, increase forex reserves, and strengthen the exchange firms’ remittances segment. He said Pakistan’s most pressing issue is its currency reserves, which are at their lowest level in decades.
Dollars are severely rationed because of the central bank’s limited import cover, while exports are harmed by global demand. Moreover, remittances to developing countries have been steadily declining, while the world blames Pakistan for the emergence of the grey market.
Pertinently, remittance last month fell by 19 percent to $2.0 billion, while foreign exchange reserves are down by $1.2 billion to $4.3 billion as of January 6 offering just three weeks’ worth of imports. The country is currently experiencing a balance of payments crisis which has severely depleted Pakistan’s foreign reserves and led to dollar shortages while large debt repayments gradually start maturing.
While Pakistan’s current financing data suggest there’s more fuel for the default inferno, doubts are once again gaining traction as the country has to make loan repayments of $8.3 billion within the next 3 months or start planning more trips to Washington.
Let dollar free and the country will get more than expected remittences
They are stupid people. Please no one listen to them.
Fake Lutairaz cannot run the country. 17 political parties, all of them are equally dakoo. Their intentions are Looto and phutoo. World knows, better than us. Moodi played game with the help of U.S and our greedy donkey 🐴 looted money for himself.