Mandat for declaration of currency by passengers who travel internationally puts more pressure on Pak rupee

By Hamza AmeeIslamabad 8th September : The recent move made by the Pakistani Civil Aviation Authority (CAA) making it mandatory for every travelers who travel internationally to declare all foreign currency in their possession.

This has increased the stress on the Pakistani rupee (PKR) which is in a battle against the US dollar.

The CAAs decision came following the approval of the State Bank of Pakistans (SBP) FATF cell, which was done without awareness of the Ministry of Finance and Revenue.The key decision made by SBP SBP and subsequently implemented by the CAA was discussed in the Senate Standing Committee on Finance meeting, in which, National Directorate General of the Financial Action Task Force (FATF) had negotiated the decision for 12 days prior to the visit of the FATF delegation.

As the decision came into effect on August 16th the Ministry of Finance or the Federal Board of Revenue (FBR) was not aware of the ruling.The FATF delegation concluded its visit to Pakistan on September 2 as part of the final formalities to verify that the country is in compliance with the plan of action.

The FATFs report, which will be released after the visit to the site will pave the way for being removed from the gray list.The decision taken by SBP to require that passengers from abroad declare all foreign currency in their possession.

This will be made with a declaration form which must be completed by the person who is taking the form and handed to the airline personnel.The declaration form should include the details of foreign and domestic currencies in possession with the passenger "Recently exchange companies have complained about the CAAs decision making the declaration of currency obligatory is also one of the main reasons for the rupees falling value," said Inayat Hussain the SBPs Deputy Governor.

of SBP "The passengers are reluctant to carry in money from abroad," pointed out Inayat Hussain.It is interesting that such an important decision was made with the unintentional knowledge and approval of the federal governments offices on finance and revenue.

The revelations reveal the lack of consistency in the decision-making process and the absence of co-ordination between the central bank and the state institutions who has taken the decision to adhere with the rules of FATF.The SBP appears to directly report to FATF and making major decisions without notifying the federal government or relevant ministries.

This should cause a lot of skepticism in the country.The decision to make an obligatory declaration of currency was taken; SBP also took another decision to permit export of US currency, which has resulted in approximately $7 million being exported by exchange firms in Pakistan from 15 August 2022.

The economy of Pakistan is trying to sustain what appears like a steady decline of the Pakistani rupee against the US.Yet, with central bank taking unanimity-based decisions without the approval of the ministries involved, numerous questions have been raised regarding the level of control the federal government has over its central bank and exchange companies.hamza/ .