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supports single currency exchange rate in Pakistan
KARACHI, November 9 (Internews):
The International Monetary Fund has
responded positively to Pakistan's move towards one currency exchange
rate, a task made less difficult by the virtual disappearance of the
margins between inter-bank and kerb rate.
Sources here say that the one exchange rate would be part of the Poverty
Reduction Growth Facility (PRGF) programme for Pakistan, awaiting
approval by the Fund's board on December 5.
Although one exchange rate is the goal of IMF economic paradigm, the
Fund has not been very enthusiastic in the past when sounded by the
officials about the mergers of inter-bank and kerb markets.
Informal discussions with IMF's Monetary and Exchange Department in
August last year indicated that the Fund would not discourage any such
proposal but would like Pakistan to move cautiously.
The issue was taken up by Pakistan in discussions recently with the IMF
on PRGF. The merger of the two forex markets is a key eventual goal set
in the letter of intent that Pakistan normally submits to the IMF to get
funding facility approvals.
The inclusion of one exchange rate agenda on PRGF may help prioritise
the issue on which substantial work has been done by the Ministry of
Finance and the State Bank of Pakistan (SBP).
An SBP task force is now busy formulating laws and procedures for
setting up operation of exchange companies under the amended provisions
of the company law.
Sources in Islamabad said that the amendment in the company law was
necessary to empower the State Bank to regulate exchange companies
because foreign exchange is involved. All public and private companies
are now controlled by the Securities and Exchange Commission of
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