Govt issues foreign currency account rules to curb forex buying from open market

foreign currency rules

According to the foreign currency rules of 2020, there could be no depositing of foreign currency in any person’s foreign currency account, which is purchased from any authorized dealer, exchange company, or money changer without the special or normal permission by the State Bank of Pakistan. However, the money brought from abroad having the clearance of Pakistan customs can be deposited.

Forex Association of Pakistan President Malik Bostan said that the Prime Minister of Pakistan has already been informed a few months back that some fake businessmen have been smuggling $10 million to $15 million in the name of trading with Iran and Afghanistan. The majority of such fake businessmen purchase the dollar from the black market.

Read more: Govt plans to engage overseas Pakistanis to boost reserves

Malik Bostan said that investment in the savings certificate was meant to strengthen the foreign exchange reserves. If these people invest in the saving certificates after purchasing the foreign exchange from the local market then due to the new rules and regulations, the purpose will not serve.

Now, according to the new foreign currency rules and regulations, account holders will be bound to seek the prior permission of the State Bank of Pakistan. The purpose of depositing will also have to be mentioned clearly. The government had allowed the people living in the country or abroad to open the foreign currency account so that they may invest in the saving certificates.

Along with a lot of other severe issues, Pakistan has been facing the problem of an acute shortage of foreign exchange reserves. Economic stability has been just a dream. A big amount of our foreign exchange has been reserved for the import of industrial products and machinery but in recent years, the country started importing agrarian products like vegetables and fruits. Unfortunately, the country also spends precious foreign exchange on the import of wheat.

Pakistan is among the top few countries which produce the cotton of very high quality but astonishingly, this year, the textile mills are compelled to import cotton from the USA and Europe. The recent rules and regulations about the deposit of foreign currency account will serve the purpose but this is the need of time that long term economic planning may be started. The real spirit of heavy industrialization is the need of time here.

In the current month, the country’s foreign exchange reserves are $12.154 billion, Bangladesh’s reserve is $40.010 billion and Indian foreign exchange reserves were 545.638 billion in February.

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