KARACHI: The banks have failed to meet the surging demand for cash amid higher inflows of foreign exchange in Ramazan.

It was also noted that dozens of automated teller machines (ATMs) were out of cash during the last two days as banks were not filling them up with the required cash.

Currency dealers said the supply of cash from banks is either delayed or not provided when required. Banking customers were found annoyed due to the unavailability of cash.

“The currency inflows in Ramazan are higher and we need higher cash to provide our customers but we have to make hard efforts to arrange cash,” said Exchange Companies Association of Pakistan General Secretary Zafar Paracha, adding that in the last days of the holy month, the demand for foreign currency or dollars generally reduces since outflows from the country come down, people don’t go out at this time while imports are also used to go slow.”

Rupee recovers against dollar

So far the inflows were normal like previous Ramazan which may be 15 to 20 per cent higher due to inflows of Zakat and other charities, he remarked.

Hundreds and thousands of Pakistanis usually return to Pakistan to celebrate Eid with their families. These Pakistanis bring foreign currencies with them to get cash by exchanging in the currency market as a result the demand for local currency increases.

“But why a bank does not provide cash to its customer sitting with a cheque of just Rs50,000,” asked a customer of a local bank. The cashier told the said account holder that the bank was short of cash and that he should come after two hours.

Banks are not supplying cash as required in their branches. It looks like the banks are making all efforts to hold the cash for maximum time and earn profit out of this cash. This attitude has become normal and most of the banks are involved in this practice for several months.

The banks can earn 22pc by investing in government papers for three months and the government is willing to borrow as much as possible. It has already borrowed over Rs2 trillion from banks during the first 9 months of the current fiscal year.

Currency dealers claimed the open market is surplus with the foreign exchange and millions are being deposited in the banks.

The State Bank of Pakistan (SBP) reported the dollar lost 81 paise to close at Rs283.90 from Rs284.71 the previous day.

However, the exchange companies quoted the dollar rate in the interbank market at Rs286 while the open market dollar rate was Rs288.

Published in Dawn, April 19th, 2023

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Increased inflows
Updated 12 Jan, 2025

Increased inflows

Govt must devise a strategy to increase industrial and agricultural productivity to boost exports and reduce reliance on uncertain remittances.
Gwadar’s potential
12 Jan, 2025

Gwadar’s potential

THE Gwadar deep-sea port, completed in 2007, was supposed to be a shining success for the other newly built ports in...
Broken metropolis
12 Jan, 2025

Broken metropolis

KARACHI, Pakistan’s economic juggernaut, is the largest contributor to the nation’s tax revenue. The Federal...
Afghan outreach
Updated 11 Jan, 2025

Afghan outreach

Islamabad should stress stronger counterterrorism measures, yet also engage the Taliban high command in Kandahar as well as politicians in Kabul.
Fragile recovery
11 Jan, 2025

Fragile recovery

STATE Bank Governor Jameel Ahmed appears to be quite optimistic over recent economic gains. That is not unusual;...
Destination Europe
11 Jan, 2025

Destination Europe

THE country’s aviation authorities can rest a little easy. After a four-year banishment from European skies,...