Latest news with #ExchangeCompaniesAssociationofPakistan
Business Recorder
07-05-2025
- Business
- Business Recorder
Indo-Pak tensions: overseas Pakistanis can mobilise $1bn monthly in emergencies, ECAP
Overseas Pakistanis have the capacity to provide up to $1 billion a month in emergency financing to Pakistan through exchange companies, offering a critical financial cushion in times of national crisis, said Malik Bostan, Chairman of the Exchange Companies Association of Pakistan (ECAP). Speaking at the Karachi Press Club on Wednesday, Bostan said the association has a swap system in place that allows the Pakistani diaspora to lend funds for a period of two years, with full repayment guaranteed by the government. 'We have a backup system ready to mobilize $1 billion a month, or $12 billion annually, from overseas Pakistanis if needed,' he told reporters. His statement comes at a time when nuclear-armed neighbours Pakistan and India are engaged in escalating skirmishes, with recent Indian attacks reportedly killing 26 and injuring 45 civilians across multiple locations. The chance of further escalation remains high, heightening concerns over regional stability and the country's economic resilience. Bostan recalled that a similar mechanism had helped Pakistan weather a severe financial crunch in 1994 when foreign exchange reserves had dropped to just $400 million. 'At that time, the exchange companies arranged $10 billion through the same swap system,' he said. He noted that he had offered to activate this financing channel again in early 2023, when Pakistan's reserves had dwindled to below $3 billion—barely enough to cover a month's imports. However, the then-government instead opted for a $3 billion short-term loan from the International Monetary Fund (IMF) in June 2023, followed by a long-term $7 billion facility signed in mid-2024. According to Bostan, around 15 million Pakistanis live abroad and collectively earn about $8 billion a month. 'They already send around $4 billion monthly as workers' remittances. The remaining $4 billion is retained overseas, which shows they have the potential to contribute even more if necessary,' he explained. In March 2025, workers' remittances hit a record high of $4.1 billion, bringing the total to $28 billion in the first nine months of FY24-25. Bostan said this figure could rise further if the government offers attractive investment options and instills greater confidence among expatriates. Despite recent tensions with India and a brief suspension of international flights, the rupee remained stable at around Rs281 against the US dollar in the interbank market, Bostan added. He said that currency dealers sold $10 million in the interbank market on Wednesday morning due to low demand for foreign currencies in the open market. He expected dollar inflows to pick up with the resumption of flights, as overseas Pakistanis returning home typically bring in foreign exchange. 'Exchange companies surrender $20–25 million daily to the interbank market, totaling around $425–450 million a month,' he noted. Bostan emphasized that overseas Pakistanis are not just a source of remittances but a financial lifeline in difficult times, urging the government to strengthen ties with the diaspora to ensure their potential can be fully leveraged during national emergencies. Tensions between Pakistan and India escalated sharply following a deadly April 22 attack in Pahalgam, Occupied Kashmir, which killed 26 people, most of them tourists. India blamed the assault on cross-border elements without offering evidence, a claim Pakistan strongly rejected, calling instead for an independent investigation. In the days since, both countries moved into a state of heightened alert. Pakistan reinforced its military presence along the border, anticipating a possible incursion. Meanwhile, the Indian leadership granted its armed forces 'operational freedom,' further inflaming fears of escalation. Despite backchannel diplomatic efforts to contain the fallout, tensions remained high.
Express Tribune
05-04-2025
- Business
- Express Tribune
SBP pumps nearly Rs3 trillion into market
Listen to article The State Bank of Pakistan (SBP) has conducted Open Market Operations (OMO), injecting approximately Rs2.94 trillion into the banking system. This liquidity injection comprised two separate operations, both with a seven-day tenor. The larger portion, Rs2.4 trillion, was injected through a conventional Reverse Repo Purchase operation, accepting all 22 quotes at a rate of 12.07% per annum. Additionally, the SBP conducted a Shariah-Compliant Mudarabah-Based OMO injection, accepting all 10 quotes for Rs5.6 billion at 12.09% per annum. The Pakistani rupee posted a slight gain against the US dollar on Friday, appreciating by 0.03% in the interbank market. By the end of the trading session, the local currency closed at 280.47, registering an increase of nine paisas from the previous day's close of 280.56. Globally, the US dollar struggled to recover, while the yen, a safe-haven asset, hovered near a six-month high on Friday. This came as markets reacted to the economic implications of President Donald Trump's newly introduced tariffs. Zafar Paracha, President of the Exchange Companies Association of Pakistan, noted that record corporate profits and repatriations by banks and multinationals are putting pressure on the rupee. Due to the passing of a central member's son, gold prices in Pakistan were not released by the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA). However, the gold market has been experiencing significant fluctuations. Internationally, gold prices fell nearly 2% on Friday as traders liquidated their bullion positions following wider market sell-offs after China retaliated with fresh tariffs against Trump's sweeping levies. Spot gold was down 1.9% at $3,053.98 an ounce after hitting a record high of $3,167.57 on Thursday. US gold futures declined 1.6% to $3,072.10. Analysts said investors were selling gold to cover losses in other asset classes prompted by margin calls. The Pakistani gold market saw a sharp price correction today following several days of strong gains, according to Adnan Agar, Director at Interactive Commodities. Agar reported that gold reached a high of $3,136 before falling to a low of $3,026. By his analysis, the market was hovering around $3,032. He attributed the broader instability to global factors, particularly Trump's trade tariffs. Heavy selling pressure was observed in the market over the past two days. "The faster it went up, the faster it's likely to come down," Agar said, as the market remains in a lowered position following the correction.
