The central bank has implemented new regulatory policies in order to curtail the outflow of foreign currency as well as to promote transparency in foreign currency transactions carried out by exchange companies.
The decision has been taken as the local currency dropped to a record low of Rs170.96 against the greenback.
There have been reports that US dollars are being smuggled from Pakistan to Afghanistan and Afghans residing in Pakistan are also hoarding dollars in huge quantities. These factors are contributing to rising pressure on the country’s already limited supply of dollars.
The State Bank of Pakistan (SBP) issued a statement on Wednesday, that allows people traveling to Afghanistan to carry only $1,000 per person for each visit and set the maximum annual limit to $6,000.
SBP has ordered exchange companies to sell foreign currency and make outward remittances, equating to $10,000 and beyond, against the receipt of funds through cheque or banking channels only.
The bank said, “Exchange companies will be required to conduct biometric verification for all foreign currency sale transactions equivalent to $500 and above and outward remittances. This requirement will be applicable with effect from October 22, 2021. All other instructions are applicable with immediate effect.”
The statement added that all other terms and conditions pertaining to this matter would remain unchanged.
It warned that regulatory action under relevant provisions of the Foreign Exchange Regulation Act 1947 will be implemented if companies failed to comply with these instructions.
The State Bank is hoping that the regulatory measures would aid improve the documentation of the sale of foreign currency by the exchange companies as well as monitor the undesirable outflow of foreign currency.