KARACHI: In order to control the volatile exchange rate in open currency market, Forex Association of Pakistan (FAP) has decided to fix the US dollar rate on a daily basis.

An emergent meeting of Exchange Companies was held on Tuesday in Karachi and chaired by Malik Muhammad Bostan, President FAP, to discuss the exchange rate issues. Malik Bostan expressed concern over the increasing dollar rate in the open currency market and urged exchange companies to refrain from making speculations and avoid unnecessary buying of US dollar.

During the meeting, exchange companies unanimously decided that Forex Association of Pakistan will fix and release the daily rates for trading of US dollar in open currency market. FAP will release rates three times in a day to facilitate exchange companies in line with the demand and supply situation of the market.

First exchange rate will be issued at 10:00AM, second rate at 2:00PM and third rate will be fixed at 4:00PM on a daily basis and will be forwarded to exchange companies through email. For today (Thursday morning) a dollar exchange rate has been fixed at Rs 118.70 (selling) and Rs 118.40 (buying), accordingly all exchange companies have been directed to strictly follow these rates.

In case of violation, in the first instance the exchange company will be penalized, if found repeated, the case will be referred to State Bank of Pakistan.

Malik Bostan said that a monitoring committee is also being constituted to ensure the implementation on FAP rates and for close monitoring of money market. During the meeting, it has also been decided that exchange companies will be penalized for non compliance of FAP rates. Some Rs 0.1 million penalty will be imposed on first violation, Rs 0.2 million on second and an exchange company have to pay a fine of Rs 0.3 million on third violation.

After third violation, complaint against the exchange company will also be forwarded to State Bank of Pakistan for an appropriate action.

All participating exchange companies endorsed the decision of exchange rate and assured full compliance.

During the meeting, president FAP also approached Irfan Ali Shah, Executive Director SBP, for dollar supply to exchange companies to meet the rising demand of the greenback. Director SBP has promised to make efforts for supply of dollar to the exchange companies.

Bostan said that SBP has already assured the exchange companies that government has no plan of further devalue Pak Rupee. He urged public not to buy dollar as its rate will decrease in the near future. Meanwhile, an urgent meeting of exchange companies was held and it decided that the rate of US dollar will not exceed Rs 118.40 for purchase and Rs.118.70 for sale on Thursday. Zafar Paracha General Secretary Exchange Companies Association of Pakistan (ECAP) advised all the Exchange Companies to follow the same decision strictly.