Banks raise concerns as govt seeks to strengthen rupee

Banks and exchange companies are facing mounting pressure to lower the dollar rate below prevailing market levels, according to sources in the financial sector. An important meeting in Islamabad on Monday, involving senior officials from the State Bank of Pakistan (SBP), the Ministry of Finance, and bankers, discussed measures to stabilise the exchange rate and reduce the dollar’s price. However, some bankers expressed reservations, noting that the government’s desired exchange rate does not reflect natural market conditions. “There is no clarity on the specific dollar rate the government wants, but the directive is clear — keep it low,” said a banking source. Banks have reportedly been advised to sell dollars to importers at reduced rates, while exporters have been told not to demand premiums on their foreign exchange proceeds. The SBP has been in active contact with commercial banks over the past week, urging them to maintain low dollar rates regardless of underlying demand and supply pressures.