30-day ban on gold import likely

January 20, 2014


The federal government is likely to ban the import of gold for 30 days in order to ease pressure on Pak rupee and rationalise the gap between open and interbank rates, it is reliably learnt. Federal Finance Minister Ishaq Dar while chairing a meeting held with the representatives of Exchange Companies in presence of Ministry of Commerce and State Bank team officials was told that against 5000 kg of gold import permits were issued.

Around 4000 kg of gold has been imported while 1000 kg of this commodity consumed for jewellery exports by MoC officials. SBP led by Deputy Governor Ashraf Wathra asked the why exports proceeds were not reflected fully in the official record and only the differential in cost of import of gold and export of jewellery was reflected. Dar expressing his annoyance asked both MoC and SBP to finalise a proper system and in the meanwhile curb the official import of gold as the exchange companies blamed gold imports as the single most important reason for rising of dollar demand.

SBP was asked to allow Exchange Companies to offer their services for seven or eight businesses which are utilising hundi/hawala to settle business transaction such as Exhibition and trade fair holders abroad; advertising forms designing hoardings and film making abroad etc.

Dar also told SBP that Federal Investigation Agency (FIA) should not be given a blank cheque to enter businesses in the financial sector bypassing SBP. FIA”s role needs to be restricted as its officials do not possess the required expertise and experience to investigate money transactions. “Without SBP”s orders; FIA should not be allowed entry in businesses”. To this order, DG SBP assured the Minister he would interact with FIA on Monday, in light of the recent Memorandum of Understanding (MoU) signed between the two organisations recently.

Exchange companies assured the Minister all help in discouraging speculation on PKR against the dollar. “We have done it for you in the past and are prepared to do it again,” the representatives of Foreign Exchange Companies vowed.

Courtesy Brecorder

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