Friday, May 16, 2008, Jamadi-ul-Awwal 9, 1429    

Banks behind currency manipulation

Nasir Mahmood

Karachi—The Banks buyings and sellings of foreign currencies have caused rise by Rs.3/- per dollar which was supposed to remain in the range of 15 to 20 paisa only. This is clear indication that banks (foreign as well as local) workings in the country were main culprits behind recent currency manipulation.
Trade & Industry circles in Karachi believe that this manipulation is highly condemnable and the SBP must investigate the Banks foreign exchange settlement spread values immediately. At present the rupee is under severe pressure and the business community has suffered huge losses, the soaring inflation is also attributed to rising dollar value, which needs to be controlled immediately.
The declining PKR value in the money market has caused chaos like situation which is a very serious blow to the trade and industry. Stable foreign exchange rate is a key factor for sustainable growth, Muhammad Haroon Agar, Vice President, KCCI commented. He said KCCI is being approached by the members, majority of them are of the opinion that the Govt. should intervene through SBP before this situation aggravates further. For this purpose SBP’s attention has been invited that KCCI analyzed the alarming situation and have also consulted within the managing committee of KCCI and found that political as well as financial market instability has caused depreciation in the rupee value, however we apprehend that this situation is also being manipulated by the banks during settlement of importers foreign exchange bills and the exporters foreign currency payments received through L/C or TT.
KCCI impressed upon the Managements of all the leading Banks to ensure that the volatile foreign currencies situation is not used to raise the Bank’s profits. We believe that the Banks in Pakistan have a very important and responsible role to play which is required for sustainable economic growth, Agar said.