LCCI calls for action on widening interbank, open market dollar rate gap

Lahore: The Lahore Chamber of Commerce and Industry has urged the government to control the dollar flight besides bridging the gap between interbank and open market dollar rate.

“Swelling divide between interbank and open market dollar rate and uncontrolled dollar flight are posing a new challenge for the trade, industry and the economy”, the LCCI President Kashif Anwar said in a statement.

He said that it is a matter for of utmost concern for the business community and the overall economic stability of our beloved nation - the persisting difference in inter-bank and open market exchange rates for the US Dollar.

He said that this alarming gap is causing significant economic repercussions and adversely affecting the competitiveness of various sectors. Due to this issue, the remittances in Pakistan exhibited a decline of more than 4 Billion Dollars in FY 2022-23.

Kashif Anwar said that Pakistan's economy is facing numerous challenges, and exchange rate stability plays a pivotal role in ensuring economic growth and investor confidence. He said that situation is depicted in the comparison of difference between inter-bank and open market exchange rates of regional economies.

He said that interbank and open market dollar rate difference rate in India is 0.13252 INR, in Bangladesh 0.25 BDT, in UAE .0006 AED while difference in Pakistan is Rs. 24.04.

The LCCI President said that the government should intervene in this matter and direct the State Bank to take concrete steps to minimize the disparity between inter-bank and open market exchange rate to promote transparency and stability in the foreign exchange market. He said that there is a need to implement strict monitoring and control mechanisms to discourage speculative trading and ensure compliance with exchange rate regulations.

“Furthermore, the State Bank should strengthen communication with the stakeholders, including the business community, by providing regular updates on the SBP's strategies and actions to address this issue”, he added and said that the LCCI is ready to collaborate with the Finance Division and State Bank of Pakistan to promote the development of a well-regulated and liquid currency market to ensure efficient exchange rate mechanisms.