PREFACE

This is an updated and revised edition of Foreign Exchange Manual. Since the publication of seventh edition of the Manual in 1992, innumerable developments have taken place in the regime of Foreign Exchange. All the efforts of de-regulation of the economy and creation of a liberal Foreign Exchange regime received great setback after nuclear detonation in 1998 resulting in imposition of sanctions etc. As the economic reform process has once again been put back on track it was deemed necessary to resume the path of liberalizing foreign exchange regime. The State Bank has made a paradigm shift in its own role i.e. from implementing direct controls to providing guidance and ex-post monitoring. Accordingly, various controls specified under the Manual have been eliminated and powers of decision making have been delegated to the Authorised Dealers. This shift has therefore necessitated a complete rewriting and revision of the Foreign Exchange Manual.

The current (eighth) edition has been published in two volumes for the convenience of the users.  Volume–I consists of summary of instructions issued to Authorised Dealers, the Foreign Exchange Regulation Act, 1947, the Notifications issued thereunder by the Federal Government and State Bank of Pakistan and the list of Authorised Dealers. Volume – II consists of specimen of the prescribed forms, list of Chambers of Commerce and Industry and Trade Associations authorised to recommend business travel cases and scales of daily allowances.

As a change in State Bank’s policy, the amendments in the Manual have been made in consultation with the persons related to Foreign Exchange field i.e. traders, importers and exporters etc. and the views of Authorised Dealers have also been incorporated. The draft proposals including Circulars are now vetted as a matter of routine by the representatives of the Authorised Dealers. Changes in the Manual, made from time to time, are conveyed to the Authorised Dealers through F.E. Circulars/Circular Letters. Although these Circulars are posted regularly on SBP Web page it is advisable, as a matter of abundant caution, that those using the Manual should consult their bankers before entering into transactions covered by the instructions laid down in the Manual. It is obvious that up-dating of the Manual will be an ongoing process and future changes will continue to be made whenever necessary keeping in view the changing demand of the users and suppliers of foreign exchange. 

                                                                             (ISHRAT HUSAIN)
                                                                            GOVERNOR