Oct 7, 2021: In a new directive, the State Bank of Pakistan (SBP) has sharply slashed the amount of dollars people buy, especially for travel to Afghanistan, amid fears of a surge in foreign exchange inflows after the Taliban took power in the neighboring country.
The state bank said in a statement, “In order to increase transparency in foreign exchange transactions by exchange companies and to prevent unwanted outflows of foreign currency, the SBP has introduced regulatory measures,”
It states that travelers to Afghanistan will be allowed to carry only $ 1,000 / – per trip with a maximum annual limit of $ 6,000.
In addition to individuals, exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to $500/- and above and outward remittances. This requirement will be applicable with effect from October 20, 2021.
“Exchange companies will sell the cash foreign currency and make outward remittances, equivalent to $10,000/- and above, against receipt of funds through cheque or banking channels only,” the SBP said.
The dollar’s depreciation has weakened the rupee sharply in recent weeks. The rupee hit a new record low against the dollar on Wednesday as demand for imported dollars outpaced light greenback sales by exporters. The rupee closed at 170.96 against the dollar in the interbank market. The local unit has depreciated 8.32% against the dollar so far this fiscal year.
The SBP, earlier in September issued new regulations, requiring banks to report $500,000 and above future foreign currency requirements for overseas buying, apparently in a move to step up monitoring of money flows and to make rupee less volatile.
The SBP issued new guidelines making mandatory for banks to submit information related to their all forthcoming imports payments of $500,000 and above for the next five days. Earlier, the banks submit information of their expected payments exceeding $1 million. Prior to the new rules, banks were submitting details of imports arriving in two days.
According to the State Bank, “These regulatory measures will help to improve documentation of sale of foreign currency by exchange companies and place a check on undesirable outflow of foreign currency.”
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