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CHAPTER V FOREIGN CURRENCY ACCOUNTS OF AUTHORISED DEALERS AND SALE OF FOREIGN CURRENCIES
This
chapter sets out the regulations governing purchase and sale of foreign
currencies by Authorised Dealers in the inter-bank market in Pakistan as
well as their purchase from and sale to the State Bank and overseas branches
and correspondents. 2. Accounts in
Foreign Currencies. Authorised
Dealers are permitted to open and maintain accounts in all fully convertible
currencies with their branches and correspondents abroad, subject to the
condition that opening of every new account should be reported to the
Director, Exchange Policy Department by a letter giving the name and address
of the foreign branch or correspondent with whom the account has been opened
and the currency of the account. 3. Foreign Currency held at the
disposal of the State Bank. Foreign
currency balances of Authorised Dealers, whether operated by their
Head/Principal Offices or branch offices, shall at all times be held at the
disposal of the State Bank which may give such directions for their disposal
as it may consider necessary and expedient. The State Bank may direct
Authorised Dealers at any time to sell either ready or for forward delivery,
foreign currency or currencies held by them to the State Bank or to such
other person or persons as the State Bank may direct. 4. Exposure Limits
and Nostro Limits. i) The State Bank fixes from time to time limits for foreign
exchange exposure on an overall basis for all currencies for each bank
authorised to deal in foreign exchange. These limits are intended to cover
the positions of all the branches in Pakistan of banks incorporated abroad,
and all the branches, including overseas branches, if any, of banks
incorporated in Pakistan. Head/ Principal Offices of Authorised Dealers
should ensure on day to day basis that these limits are not exceeded. It is
advisable that Authorised Dealers maintain square or near square exposure. ii)
There are no Nostro Limits for balances held abroad. 5. Calculation of
Exposure Limits. The
guidelines for calculating the exposure appear as a Memorandum at the end of
Appendix III. 6. Exchange
Exposure Position. Authorised
Dealers are required to report to the Exchange & Debt Management
Department, State Bank of Pakistan, all the foreign exchange transactions
(ready, forward, take-ups, cancellation and adjusting entries etc.) entered
into by them with customers as well as with other Authorised Dealers that
create foreign exchange exposure in any currency, transacted during a
day on floppy diskettes using the
software installed by SBP on each bank's computers. Floppy
diskettes alongwith following reports generated by the software, duly signed
by an Authorised Officer, are required to be submitted on daily basis to the
Exchange & Debt Management Department, State Bank of Pakistan by close
of office hours: a)
Deals b)
Take-ups c)
Cancelled deals d)
Adjusting entries e)
Closing balance 7. Purchase and
sale of Foreign Currencies. Authorised
Dealers may freely purchase foreign currencies, as there are no restrictions
on inward remittances. All sales of foreign currencies to customers must,
however, be in cover of genuine transactions approved by the State Bank or
by the Authorised Dealers under powers delegated to them. Authorised
Dealers may freely buy and sell foreign currencies from and to other
Authorised Dealers in Pakistan provided they remain within their permissible
exposure limit. 9.
Purchase of U.S. Dollars from and their sale to the Authorised
Dealers by the State Bank. The
State Bank may, at its discretion, buy U.S. dollars from and sell to the
Authorised Dealers both ready and forward. 10.
Purchase and sale of Foreign Currency from and to Banks’ Overseas Authorised
Dealers may freely purchase
both ready and forward one foreign currency against another from their
overseas branches and correspondents in order to cover their positions.
Purchase of foreign currencies from and their sale to banks' overseas
branches and correspondents against Rupee may be made in accordance with the
provisions of Chapter VII. |
