Foreign exchange curbs

The government is feeling seriously worried about the growing paucity of Foreign exchange curbs in the country and in a major development, the federal government and the State Bank of Pakistan have decided to limit the amount of foreign currency purchased per person and capped the outflow of remittances to $50,000 annually aimed at reducing the speculations-driven high dollar value in the open market. It has also been decided that FIA will be used against those foreign currency dealers involved in speculative currency trading and action will be taken against them who will be found engaged in carrying out such activity. By taking this action the per day currency purchase and outward remittance limit has also been cut by half, to $5,000 with a maximum annual cap at $50,000. It is also reported that the SBP will shortly notify amendment to existing exchange companies’ regulations and give effect to these decisions. It is a well-known fact that currency dealers are a major cause of currency manipulation and they are a hard nut to crack as they hide behind import and export requirements particularly of essential items. The government agencies cannot hold letters of credit for indefinite time and there lies the lacuna for manipulation. TW