Dollar crashes in the open market trading as SBP’s allows banks to buy $ from inter-bank to settle credit cards payments
ISLAMABAD: In the open market trading, the value of the US dollar crashed a day after the State Bank of Pakistan allowed banks to buy dollars from the inter-bank market for the settlement of international payments through credit cards.
On Thursday morning, the dollar-rupee exchange rate in the open market fell in the range of 290 to 295 rupees, from 315 rupees of the previous day. Thus, the value of the dollar crashed by 20-25 rupees in the open market in just one day in comparison with the inter-bank exchange rate.
On Thursday the dollar-rupee parity in the inter-bank market trading remained almost the same, Rs 285.
Dollar crashes in open market on Thursday morning.
On Wednesday the SBP said, “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).”
Good News for Credit Card holders
Announcing good news on Wednesday evening, the State Bank of Pakistan allowed banks to purchase dollars from the interbank market and settle cross-border card-based transactions.
The central bank stated, “In view of representations received from stakeholders, it has been decided to allow the authorized dealers to buy dollars from interbank to settle card-based international transactions such as Visa and Mastercard, etc.”
According to the SBP, the notification will apply immediately and until July 31, 2023.
SBP’s decision to reduce the rate of the dollar in the open market
Importantly, authorized dealers were buying dollars from the open market to settle cross-border card-oriented transactions. It caused an extra financial burden on credit card holders as the gap between the interbank and open market value of the US dollar widened to Rs 27 on May 31.
Zafar Paracha, General Secretary of the Exchange Companies Association of Pakistan welcomed the SBP’s decision.
He said, “It would reduce the widening gap between interbank and open market exchange rates.”
Recently, the dollar-rupee exchange rate in the open market has crossed Rs310.
Meanwhile, in interbank this exchange rate was fluctuating around Rs 285. The SBP’s decision would not only reduce the open market rate but also give credit cardholders relief for international payments.
