KARACHI: The State Bank of Pakistan (SBP) has imposed another restriction on buying dollars from the open market as it made biometric verification compulsory for all those who would buy $500 or above from the open market. On the other hand, the dollar set a new record as the price rose to Rs171 on Wednesday.
“The exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to $500 and above and outward remittances,” said the SBP on Wednesday.
Earlier, anyone could purchase dollars from exchange companies by providing a copy of national identity card. “This requirement will be applicable with effect from October 22, 2021,” the SBP added.
The major step has been taken apparently to stop outflow of dollars from the country to Afghanistan, which significantly increased dollar demands in the open market and destabilised the exchange rate.
The SBP has already taken several measures to get control over steep depreciation of local currency against the high demand of US dollar. The exchange companies have earlier highlighted through the media that outflow of dollars to Afghanistan is very high while the Fitch Rating company also recently cited this issue as one of the reasons for destabilisation of exchange rate.
According to the measures taken by the State Bank, each person travelling to Afghanistan will be allowed to carry maximum $1,000 per visit, with the annual limit of $6,000.
“In order to enhance transparency in the foreign currency transactions by exchange companies and to curb undesirable outflow of cash foreign currency, the State Bank has introduced some regulatory measures,” said a circular issued by the SBP.
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.
“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,” said the SBP.
“The condition of biometric on purchase of $500 and above will help to reduce buying from open market which is the target of the State Bank as well as the government,” said Malik Bostan, heading the Exchange Companies Association of Pakistan.
He said the proposal of biometric was in discussion with exchange companies. He said the condition of $1,000 per person takeaway to Afghanistan was needed to stop unnecessary outflow of foreign currency from Pakistan causing destabilization of exchange rate.