The development has taken place after the State Bank of Pakistan decided to allow banks to purchase dollars at the interbank market rate for international credit card payments.
KARACHI: (UrduPoint/Pakistan Point News-June 1st, 2023) The Pakistani rupee experienced a massive surge against the US Dollar in the open market on Thursday, following the State Bank of Pakistan's (SBP) decision to allow banks to purchase Dollars at the interbank market rate for international credit card payments.
The SBP's decision came in response to the International Monetary Fund's demand for Pakistan to stabilize its Currency market before resuming a $6.5 billion bailout program.
"In view of the representations received from stakeholders, it has been decided to allow Authorized Dealers to purchase USD from Interbank for settlement of card-based cross-border transactions with IPS [international payment schemes]," stated the central bank in its circular.
Analysts had anticipated a decline in the value of the rupee following the implementation of new guidelines.
Since January this year, the rupee has experienced a depreciation of 23.6% in the interbank market.
"This is the first time in Pakistan's history that the dollar rate has dropped by Rs27," stated Malik Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP), expressing his congratulations to Finance Minister Ishaq Dar and the SBP governor.
Bostan commended Dar for promptly taking action based on his advice, which contributed to the significant appreciation of the rupee against the dollar.
The head of the moneychangers' trade body explained that commercial banks were previously buying dollars from the open market at a higher rate for credit card settlements.
Bostan revealed that Dar contacted him when the dollar reached Rs315, seeking clarification on the widening gap between interbank and open market rates.
"After learning about the situation, the finance minister took prompt action and issued the circular yesterday."
Bostan emphasized that this is a trial period until July 31 and expressed hope that the rupee rate will continue to increase.
He also highlighted that this move would benefit pilgrims, who were previously buying dollars at a rate of Rs315, as they can now acquire the greenback at a much lower rate of Rs285.
