The difference in rates provided on dollars received as export proceeds and on opening letters of credit for imports has reportedly increased by a factor of four within the month of May.
"We are being paid Rs67 for a dollar on our export proceeds and are being asked to give Rs69 for a dollar to open letter of credit for import,” claims Ikhtiar Baig, a member of the finance and bank credit standing committee of the Federation of Pakistan Chambers of Commerce and Industry.
The banks have refuted claims of profit maximisation and explained the differential expansion in rates by citing a considerable drawdown on Pakistan's foreign exchange reserves. This has led to extra guarantees being demanded by foreign banks on letters of credit registered for import transactions.
In May, state bank governor Dr Shamshad Akhtar released a statement designed to re-assure bankers and foreign exchange dealers that significant foreign exchange inflows into Pakistan were expected in the medium term.
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