'Continuity of reforms' essential for forex market stability, says former minister

Former Minister of State & Chairman, Board of Investment Muhammad Azfar Ahsan. —X/@MAzfarAhsan

Former minister of state for investment Muhammad Azfar Ahsan, while addressing the precarious foreign exchange market situation, has said that the government needs to bring reforms and address the existing deficiencies in the foreign exchange market.

The former chairman Board of Investment also expressed hope for economic revival amid increasingly apparent positive results due to measures taken by the caretaker government and State Bank of Pakistan (SBP).

Commenting on the prevalent issue of smuggling affecting the forex market Ahsan said: "Smuggling has not only resulted in the evasion of duty and taxes but has also had a profound impact on the exchange market."

Stressing the significance of the role being played by law-enforcement agencies (LEAs) in light of their effective measures against illegal trade and discouraging the black market, the former minister termed the commitment of the Chief of Army Staff (COAS) General Asim Munir to combat smuggling being able to play a "catalytic role" with regards to reform in the forex market.

With regard to the issuance of licences to the exchange companies, Ahsan — while hinting towards a uniform and regulated capital framework — said that the SBP's recent regulations have effectively abolished licences for A-type, B-type, and franchise exchange companies.

“This move is set to pave the way for new, reputable exchange companies to operate transparently, offering superior services to their customer," he said.

The former minister also lauded the forex market forms such as raising the minimum capital requirement for the exchange companies from RS 200 million to RS 500 million, along with investments from 10 major banks and promises to alleviate the capital shortage.

"The ripple effect of improvement in the rupee value and eradication of the black market would improve the overall economic conditions of the country," former chairman BOI said while adding that these initiatives are indispensable for safeguarding the stability and growth of Pakistan's exchange market.