SBP penalises 7 more banks for forex violations

Pakistan’s central bank has once again found at least seven commercial banks, including leading ones, to have violated instructions on transactions in foreign currencies, imposing financial penalties totalling Rs775.54 million on as many as nine banks in the quarter ending March 31, 2024. The central bank has tightened its oversight of foreign exchange dealings by commercial banks and exchange companies amid the country’s foreign exchange reserves (held by SBP) remaining low at $8 billion for the past couple of months until April 5, 2024, providing import cover for less than two months. These reserves are estimated to have further dropped to around $7 billion temporarily after repaying a foreign debt worth $1 billion last week. They are expected to rise back to around $8 billion again after the IMF releases the last tranche of $1.1 billion later this month (April 2024).