Good news for credit card holders: SBP allows banks to use an interbank rate of $ to settle international payments
ISLAMABAD: Announcing good news, the State Bank of Pakistan today allowed dealers 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.
Demand for dollar increases
These days, the demand for dollars has increased in the open market due to summer vacation and Hajj season. This is the main reason for the wide gap between the interbank and open market value of the dollar in Pakistan.
According to Paracha, the SBP’s decision would reduce the open market exchange rate by Rs20-25 per USD in the coming days.
“It will also help to reduce the big gap between interbank and open markets. It will also be helpful to enhance the inflows of remittances,” he added.
