The Exchange Companies Association of Pakistan (ECAP) has proposed a specific exchange rate for remittances and export revenues in order to increase foreign inflows.
According to Zafar Paracha, general secretary of ECAP, the economy is unusually unstable right now, and banks have been reluctant to issue the LCs, of which numerous imports are pending. Giving foreign Pakistanis preferential rates will help to overcome this issue and restore things to normal.
ECAP has advocated for the establishment of a unique US Dollar to Indian Rupee exchange rate for export-import invoices and remittances. The offer might be 240 rupees for every dollar to Pakistanis living abroad who are getting remittances from home through exchange companies. According to Paracha, it will help to increase remittances, reduce Hundi/Hawala, boost the legitimate route, and also result in a withdrawal from the grey market.
The exporters’ export revenues may be determined at a rate of Rs. 228 per $1. And based on the weighted average rates of exporters and home remittance, the cost for importers would be Rs 234. He continued by saying that this will aid in increasing exporter inflows and home remittances.
He said that this action will invigorate exporters, overseas Pakistani businesses, and exchange firms while demoralizing the Hundi/Hawala industry. The nation’s economy will be supported by the healthy inflows of domestic remittances and export revenues, which will result in an increase in foreign exchange reserves.
According to Paracha, Pakistani banks are reluctant and won’t open LCs for numerous sectors and industries that are having issues and being adversely affected.
In light of this, the exchange businesses decided to lighten the load on the government and wanted to assist by contributing USD 50,000/-, much like ECAP does for credit card settlement, education, medical care, travel, ziarat, Hajj, and umrah, he continued.