PakistanTech

SBP Proposes Biometric Verification for Buying $500 or More from Exchange Companies

The State Bank of Pakistan (SBP) has announced a new policy to curb the illegal hoarding and smuggling of foreign currency, especially the US dollar, which has been causing a severe shortage of foreign exchange reserves and a depreciation of the Pakistani rupee.

According to the new policy, which is part of a comprehensive reform package for the exchange companies sector, anyone who wants to buy $500 or more from an exchange company will have to undergo biometric verification through the National Database and Registration Authority (NADRA).

The SBP has also lowered the US dollar purchase limit for travel purposes from $10,000 to $5,000 per trip and from $60,000 to $30,000 per year. Moreover, customers who want to buy $2,000 or more from an exchange company will have to pay from their Pakistani rupee account.

The SBP has set a daily limit of $10,000 and an annual limit of $100,000 for individual customers who want to buy foreign currency from exchange companies.

The new policy was revealed by the top officials of the SBP at a meeting of the Special Investment Facilitation Council (SIFC) Apex Committee on January 3, 2024. The SIFC is a high-level body that oversees the implementation of the IMF bailout program for Pakistan.

The SBP officials said that the new policy aims to deter the hoarding and speculation of foreign currency, which has been hurting the country’s economy and balance of payments. They said that the new policy will also ensure transparency and accountability in the foreign exchange transactions.

The SBP officials also said that the new policy will be made public after the approval of the next SIFC meeting.

In addition to the new policy, the SBP officials also informed the SIFC that the Federal Investigation Agency (FIA) will be assigned to launch a crackdown against the illegal foreign exchange operators, in coordination with the SBP and other relevant stakeholders.

The SBP’s new policy comes at a time when Pakistan is facing a severe dollar crisis, as its exports and remittances are not sufficient to finance its imports and debt repayments. The country’s foreign exchange reserves have fallen to a critical level of $3.7 billion, which can barely cover three weeks of imports.

The dollar crisis has also caused the Pakistani rupee to lose its value against the dollar, reaching a record low of 270 in late January 2024. The rupee’s depreciation has fueled inflation and increased the cost of living for the common people.

The SBP’s new policy is expected to stabilize the foreign exchange market and improve the country’s economic situation.

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