All
Authorised Dealers
in Foreign Exchange,
Dear
Sirs,
FORWARD
SALES
Enquiries
have been received whether exporters in Pakistan, who receive
orders for export of goods to be invoiced in a convertible
currency other than the U.S. Dollar, can book forward exchange
cover with banks outside Pakistan in respect of the dollar
versus the contract currency exchange risk, if they do not
wish to obtain a cover in Pak rupees from an Authorized
Dealer in Pakistan. In this connection, attention is invited
to Section 4(1) of the Foreign Exchange Regulation Act,
1947, which provides, inter-alia, that except with the previous
permission of the State Bank, no person resident in Pakistan
shall outside Pakistan, buy and borrow from, or sell or
lend to, or exchange with any person any foreign exchange.
In view of this provision, booking of forward exchange abroad
requires State Banks approval.
2.
It has been decided to give general permission to the exporters
in Pakistan to book forward exchange cover in the international
market in respect of contracts made by them for export of
goods from Pakistan, priced in a convertible currency other
than U.S. Dollar, in case they do not desire to obtain a
forward cover from an Authorized Dealer in Pakistan in rupee
terms and wish to keep the dollar versus rupee portion of
the transaction uncovered, subject to the following conditions:-
-
Such
a cover is obtained only against a firm contract for
export to be invoiced in a convertible currency.
-
No
forward contract is booked against the same export transaction,
with an Authorized Dealer in Pakistan.
-
The
forward cover is obtained from a bank outside Pakistan
without involving any exposure on the part of a banks
branch in Pakistan.
-
No
remittance of any fees, or exchange difference for closing
out the contract is required from Pakistan.
3.
When a forward cover is booked in accordance with the permission
given above, the exporter should submit a copy of the cover
note to the Authorized Dealer in Pakistan through which
the export documents are proposed to be sent abroad, and
declare on the "E"
form, the value of the goods. Both in the contracted
currency as well as its equivalent in U.S. Dollars at the
export receipt in its monthly foreign exchange returns,
would attach the cover note with the triplicate "E"
Form.