- The State Bank of Pakistan (SBP) has discouraged interbank trading amid a severe scarcity of US dollars.
- The rupee had its largest weekly decline in more than 20 years last week.
- SBP Acting Governor told that Pakistan will be able to comfortably satisfy its financial demands.
The State Bank of Pakistan (SBP) has discouraged interbank trading amid a severe scarcity of US dollars that caused the rupee to experience its biggest weekly decline since 1998, according to an international news website, which cited knowledgeable sources.
With its limited authority under the International Monetary Fund agreement, the central bank encouraged commercial banks to manage import payment requests from their own inflows, such as exporter accruals and remittances, in order to stop the unfettered collapse of the rupee against the US dollar.
Under the condition of anonymity, the sources also advised the journal that if banks still needed to borrow money, they should request it from the monetary authority.
It should be noted that the SBP did not respond to a request for comment sent via email.
The Pakistani rupee had its largest weekly decline in more than 20 years last week due to the fact that the nation’s foreign exchange reserves, which are currently around $10 billion, are only sufficient to fund less than two months’ worth of imports.
However, with an IMF bailout on track, SBP Acting Governor Murtaza Syed told that Pakistan will be able to comfortably satisfy its financial demands.
The publication cited sources when it stated that it had already been highlighted that some commercial banks were requesting approval from the SBP and giving US dollars at a premium, which was increasing prices for their clients.
On July 20, commercial banks offered dollars to energy businesses at prices of Rs238 and Rs242, or around 8% more than the day’s official closing rate.
Raheel Ahmed, CEO of Karachi-based steel importer VN Lakhani & Co, added that banks that once issued international payments in a day now take more than a week.
Miftah Ismail, Pakistan’s finance minister, stated during a news conference on July 21 in Islamabad that “Pakistan has encountered dollar payment strain due of energy payments.”
Next month, Ismail predicted, “the tendency will reverse as there will be more dollar supply than demand.”
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