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SBP brings ‘structural reforms’ for ‘transparency’ in exchange companies’ sector

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1 year ago

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  • Various exchange companies to be consolidated as a single category.
  • Reforms’ aim is to cater to the legitimate forex needs of public.
  • Rupee strengthens against dollar in open market.

Amid the presence of a grey market of the dollar, the State Bank of Pakistan (SBP) on Wednesday decided to introduce structural reforms in order to bring “transparency” in the exchange companies sector.

“As part of these reforms, leading banks actively engaged in foreign exchange business will establish wholly owned Exchange Companies to cater to the legitimate foreign exchange needs of general public”, a press release issued by the central bank stated.

Under the reforms, various types of existing exchange companies and their franchises will be consolidated and transformed into a single category of “Exchange Companies” with a well-defined mandate.

Moreover, the minimum capital requirement for exchange companies has been increased from Rs200 million to Rs500 million.

Here are the Exchange Companies reforms

• ECs-B may graduate to Exchange Companies after meeting all regulatory requirements, within three months; otherwise, their license would be cancelled.

• Franchisees of Exchange Companies may either merge or sell operations to the concerned franchiser company, within three months after meeting all regulatory requirements.

For the above purpose, the ECs-B and Franchises of Exchange Companies will submit their conversion plan and seek a no-objection certificate (NOC) from SBP within one month.

The above reforms have been introduced to provide better services to the general public and bring transparency and competitiveness in the exchange companies’ sector.

This is expected to strengthen governance, internal controls, and compliance culture in the sector, the SBP stated. 

Rupee strengthens against dollar in open market

Meanwhile, the Pakistani rupee gained ground against the US dollar in the open market in the last couple of days, and closed at Rs312.

The greenback depreciated Rs 17 during the last two days, since the close of Rs329 two days ago.

Chief of Army Staff (COAS) General Asim Munir’s meeting with prominent businessmen, where he discussed ways to boost investment and economic growth brought a positive mood in the market.

“It has created a positive sentiment in the market, which reflected from the dollar-rupee parity which remained almost stable in the interbank and open market,” said general secretary of the Exchange Companies Association of Pakistan Zafar Paracha said on Tuesday.

In the meeting, COAS Gen Munir assured the business community of the army’s support in tackling corruption, smuggling, tax evasion and exchange rate issues.

Govt cracks down against dollar smugling, hoarding

In a move against the cartels of organised crimes, the government launched a crackdown to curb dollar smuggling and hoarding.

As per the Ministry of Interior, lists of the groups involved in the crimes has been prepared after the identification of facilitators of the government officials and their patrons.

It said that the illegal movement of goods and currency will not be allowed, trading of commodities and currency will be transformed, while surveillance systems at land, sea and airports will also be upgraded.

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With its second-largest surge ever, PSX approaches 114,000 points.

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3 days ago

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Driven by renewed activity from both private and government financial institutions, the Pakistan Stock Exchange (PSX) saw its second-largest rally in history on Monday.

The market regained many important levels in a single trading session as it rose with previously unheard-of momentum.

Intraday trading saw a top increase of 4,676 points, and the PSX’s benchmark KSE-100 Index gained 4,411 points to settle at 113,924 points. This impressive rebound demonstrated significant investor confidence by reestablishing the 100,000, 111,000, 112,000, and 113,000-point levels.

The market also saw the 114,000-point limit reestablished during the trading session.

The positive tendency was reflected when the market’s heavyweight shares touched its upper circuits. Among the most busiest trading sessions in recent memory, an astounding 85.78 billion shares worth a total of Rs55 billion were exchanged.

Experts credited the spike to heightened institutional investor activity and hope for macroeconomic recovery. Considered a major market recovery, the rally demonstrated the market’s tenacity and development potential.

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In interbank trade, the Pakistani rupee beats the US dollar.

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1 week ago

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In the international exchange market, the US dollar has continued to weaken in relation to the Pakistani rupee.

The dollar fell to Rs278.10 from Rs278.17 at the beginning of interbank trading, according to currency dealers, a seven paisa loss.

In the meantime, there was a lot of turbulence in the stock market, but it recovered and moved into the positive zone. The KSE-100 index recovered momentum and reached 116,000 points after soaring 1,300 points.

Both currency and stock market swings, according to analysts, are a reflection of ongoing market adjustments and economic uncertainty.

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Business

Phase II of CPEC: China-Pakistan Partnership Enters a New Era

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2 weeks ago

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The cornerstone of economic cooperation between the two brothers and all-weather friends is still the China-Pakistan Economic Corridor, the initiative’s flagship project.

In contrast to reports of a slowdown, recent events indicate a renewed vigour and strategic emphasis on pushing the second phase of CPEC, known as CPEC Phase-2, according to the Ministry of Planning, Development, and Special Initiatives.

According to the statement, this crucial stage seeks to reshape the foundation of bilateral ties via increased cooperation, cutting-edge technology transfer, and revolutionary socioeconomic initiatives.

Planning Minister Ahsan Iqbal is leading Pakistan’s participation in a number of high-profile gatherings in China, such as the 3rd Forum on China-Indian Ocean Region Development Cooperation in Kunming and the High-Level Seminar on CPEC-2 in Beijing.

His involvement demonstrates Pakistan’s commitment to reviving CPEC, resolving outstanding concerns, and developing a strong phase-2 roadmap that considers both countries’ long-term prosperity.

At the core of these interactions is China’s steadfast determination to turn CPEC into a strategic alliance that promotes development, progress, and connectivity.

Instead of being marginalised, CPEC is developing into a multifaceted framework with five main thematic corridors: the Opening-Up/Regional Connectivity Corridor, the Innovation Corridor, the Green Corridor, the Growth Corridor, and the Livelihood-Enhancing Corridor.

With the help of projects like these, the two countries will fortify their partnership, and CPEC phase-2 will become a model of global economic integration and collaboration that benefits not just China and Pakistan but the entire region.

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