state bank of pakistan launches fx matching platform for interbank deals
The State Bank of Pakistan (SBP) has introduced FX Matching, a platform aimed at enhancing transparency in the foreign exchange market. Effective from January 29, 2024, the SBP has made it mandatory for Authorized Dealers (ADs) to utilize FX Matching or FXT Dealing for executing outright interbank FX transactions impacting the Foreign Exchange Exposure Limit (FEEL).
According to the circular issued by the SBP, FX Swap transactions with the same counterparty will continue under the existing practices, including FXT Dealing, telephone, or other means. Trading on FX Matching will align with SBP’s announced timings for interbank FX trading, with caution advised on placing bids/offers and executing transactions to avoid errors.
The FX Matching platform will facilitate trading for a minimum lot size of USD 500,000 and its multiples. Bid or offer prices on FX Matching will be firm and remain valid until cancelled by the participant quoting the prices. Participants are instructed to cancel all open orders before logging off from the platform and the close of the market for interbank FX trading.
Additionally, in cases where the Federal Reserve Bank of New York is closed, and the interbank FX market is open in Pakistan, trading on FX Matching will be in Tom value.
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This initiative aligns with the SBP’s efforts to introduce reforms in the foreign exchange market, ensuring adherence to commitments made to the International Monetary Fund (IMF). The move towards an online trading platform for forex trading is a significant step in fostering efficiency and transparency within Pakistan’s financial markets.
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As part of the broader commitment to financial market reforms, Pakistan is set to launch the online forex trading platform, further modernizing and streamlining interbank foreign currency transactions.