KARACHI: Pakistan’s national currency slightly recovered against the greenback a day after the central bank announced to curb the outflow of the US dollar to Afghanistan, local currency traders said on Thursday.
The rupee closed at Rs170.87 — up by 0.05 percent or nine paisas — against the greenback in the interbank market, according to the exchange rate data released by the State Bank of Pakistan (SBP).
The currency appreciated in the open market from Rs172.20 to Rs171.30 for selling and Rs171.70 to Rs171 for buying, said the Exchange Companies Association of Pakistan (ECAP).
Pakistan’s national currency on Tuesday dipped to an all-time low of Rs170.96 against the US dollar mainly due to the rising demand for imports and the outflow of the US dollar to Afghanistan.
Under the new measures adopted by the SBP, people traveling to Afghanistan will only be allowed to carry $1,000 per visit, with a maximum annual limit of $6,000.
Besides, the exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to $500 and above.
“The full impact of the central bank’s measures will be known after at least a month,” Samiullah Tariq, director research at the Pakistan-Kuwait Investment, told Arab News.
“The measures will lead to the documentation of the cash flows, especially the outflow of the foreign exchange from Pakistan,” he added.
Currency dealers said steps taken by the central bank were much needed under the current circumstances.
“One thousand dollars is quite enough for a person who is traveling to Afghanistan on a day trip,” Zafar Paracha, the ECAP secretary general, told Arab News. “Even the upper limit of $10,000 for other destinations is too high.”
Pakistan has taken steps to curb the outflow of US dollars to Afghanistan at a time when an Afghan business delegation is visiting the country. However, the local business community said the measures would not impact trade between the two countries.
“This is only to restrict the flight of dollars from Pakistan and has nothing to do with Afghani or trade with Afghanistan,” Zubair Motiwala, Chairman of the Pakistan-Afghanistan Joint Chamber of Commerce and Industry, told Arab News.
“The US dollar from Pakistan was going to Afghanistan via land routes,” he said, “which is why the government had to take steps to stop the outflow of cash.”
Pakistan’s national currency appreciates after central bank curbs outflow of US dollars to Afghanistan
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Pakistan’s national currency appreciates after central bank curbs outflow of US dollars to Afghanistan
- Analysts say the new measures announced by the State Bank will help document outflow of foreign currencies from the country
- People traveling to Afghanistan will only be allowed to carry $1,000 per visit, with a maximum annual limit of $6,000