KARACHI: The State Bank of Pakistan (SBP) is conducting a thorough probe into all forex deals undertaken by banks during the last one week to ascertain the causes behind turmoil in the forex inter-bank market, it is reliably learnt.
The SBP inspectors have visited the treasuries of several banks to collect information and have also instructed banks to keep their head office and treasury open on Saturday as well as in order to examine their dollar purchases were backed by client orders or were meant to hoard dollars to make a windfall.
Source said SBP had warned the Ministry of Finance (MoF) that there could be cannibalizing of FE25 deposits with banks, which already from part of the country's forex reserves, if MoF raised dollars from local banks. But MoF went ahead with deal on assurance that the mandated banks will bring dollars from abroad only.
In case the SBP was able to prove that the cause of the recent rupee-dollar turmoil was because of 625 million dollar deal, it could be cancelled.
The SBP could also impose penalties on banks which aided in speculation on PKR. Meanwhile, the Governor State Bank of Pakistan, Yasin Anwar, will also be meeting bank chiefs on Monday to exchange views on SBP plans to keep the volatility on money and forex market under control.
A SBP circular letter on keeping the head-office and treasury open says: "It has decided that bank head office including treasury will remain open on Saturday, the September 28, 2013, for normal office hours from 9:00 am till 5:30pm to facilitate inspection process for which team have already been deputed by the SBP Banking Inspection Department. SBP has also advised banks to make necessary arrangement for inspection".
On Thursday, for the first time in the history of the country the rupee reported a single day fall of almost Rs 3 against the dollar and was being traded at Rs 110.50 to the greenback in interbank market. The biggest ever fluctuation forced the State Bank to intervene in the market after which the rupees revalued and was closed at 105.50 to the dollar in interbank market on Thursday. However, the historical volatility in the currency market raised several questions particularly, regarding recent deal of $625 million between MoF and a consortium of seven banks. Therefore, SBP has decided to conduct the inspection of banks' treasuries to find out the reasons behind the volatility in interbank bank market.
No comments:
Post a Comment