The lack of US dollar banknotes has caused the Pakistani rupee to drop to its lowest weekly level in more than 20 years, according to reports, and the State Bank of Pakistan (SBP) has discouraged interbank transactions.
The central bank has asked commercial lenders to address import payment needs from their inflows, such as exporter accruals and remittances, according to sources familiar with the internal discussions. They also said that if the bank still needs to borrow, the monetary authorities must provide permission.
Other reports said that certain banks are providing dollars at a premium and seeking authorisation from the SBP, which is hiking rates for its customers.
Banks transferred dollars to energy firms on July 20 at rates between Rs. 238 and Rs. 242, or around 8% higher than the official closing rate for the day.
The CEO of V.N. Lakhani & Co., a steel importer in Karachi, commented on the effects of the impending currency crisis and stated that banks that once disbursed international payments in a day are now taking more than a week.
The currency fell by almost 8% last week, the highest since 1998, amid the instability, as Pakistan’s foreign exchange reserves fell short of covering less than two months’ worth of imports.
However, the government would be able to meet its financial needs thanks to an impending rescue package from the International Monetary Fund (IMF), according to SBP’s Acting Governor, Murtaza Syed.
“Our ongoing IMF program is supporting our complete satisfaction of our external funding needs over the next 12 months,” he added.
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