SBP orders vigil on outflows

Amid heightened tensions with India, the State Bank of Pakistan has asked banks to closely monitor dollar outflows, as the escalating conflict could rapidly increase demand for the greenback. However, currency dealers in both the inter-bank and open markets said there was no panic buying of dollars, nor had demand escalated. According to a currency dealer, over 90 per cent of remittances to Pakistan come through Indian exchange companies, particularly from the Middle East — a channel that may face disruptions if the conflict between the two countries prolongs. “…In the case of a full-fledged war, these companies could be used by India as a tool to pressure Pakistan.” Currency dealers, speaking on condition of anonymity, said Indian exchange companies are the main handlers of remittances to Pakistan.