By Staff Reporter
ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet approved revisions to two schemes on Thursday, aimed at incentivizing banks and exchange companies to increase remittance inflows and boost the country’s foreign exchange reserves.
Under the revised Transfer (TT) Charges Scheme, the flat reimbursement rate of SAR 30 per eligible transaction will be divided into two components: a fixed rate of SAR 20 and a variable rate of SAR 8-15. The variable component will be linked to the incremental growth in remittances, with banks receiving higher rewards based on their performance in increasing remittance inflows.
Similarly, the Incentive Scheme for Exchange Companies (ECS) has been revised, with the base rate for the fixed component increased from PKR 1 to PKR 2 per USD surrendered. The variable component will also be linked to the incremental growth in remittances, with ECSs receiving higher rewards based on their performance in mobilizing remittances.
The revised schemes aim to encourage banks and exchange companies to increase remittance inflows, thereby boosting the country’s foreign exchange reserves. This move is part of Pakistan’s efforts to stabilize its currency and address its balance of payments crisis.
The revisions are expected to further incentivize banks and exchange companies to increase remittance inflows, with the variable component of the reimbursement rate and incentive scheme providing a direct link to performance.
“These revisions are expected to further incentivize banks and exchange companies to increase remittance inflows, thereby boosting the country’s foreign exchange reserves,” a statement said.
Remittances are one of the major sources of foreign exchange earnings for Pakistan. The foreign exchange reserves held by the central bank rose by $112 million to $9.4 billion in the week ending August 23. This increase brought the country’s total liquid foreign reserves to $14.77 billion, with commercial banks holding net foreign reserves of $5.37 billion.
The ECC, chaired by Finance Minister Muhammad Aurangzeb, also approved summaries from the Ministry of Communications regarding the realignment of the Karakoram Highway (KKH) under the China-Pakistan Economic Corridor (CPEC) and the Chakdara-Timergara road project.
“After detailed discussions and deliberations, and in order to comply with codal requirements, the ECC allowed the Ministry of Communications/National Highway Authority to proceed with provisions of the Framework Agreement in accordance with Rule 5 of the Public Procurement Rules, 2004, for the procurement of construction of the realignment of KKH (Thakot Raikot Section, 241 KM) project under CPEC (Phase-II),” the statement said.
The ECC considered another summary from the Ministry of Communications regarding the “Chakdara-Timergara, 39 Km Road Project (N-45)”. It was discussed that Rule 5 of the Public Procurement Rules-2004 (PPRA) can be invoked after authorization from the ECC and consultations with relevant stakeholders.
“Foregoing in view, the ECC authorized the Ministry of Communications/National Highway Authority to proceed in accordance with Public Procurement Rule 5 in the procurement of consultancy services required for Section 1 (Chakdara-Timergara, 39 km) under the Chakdara-Chitral Road Project (N-45).”
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