Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 09
February 02, 1993 

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 Bank’s 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:-

  1. Such a cover is obtained only against a firm contract for export to be invoiced in a convertible currency.

  2. No forward contract is booked against the same export transaction, with an Authorized Dealer in Pakistan.

  3. The forward cover is obtained from a bank outside Pakistan without involving any exposure on the part of a bank’s branch in Pakistan.

  4. 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.

       
Home
About SBP
Publications
Economic Data
Press Releases
Circulars/Notifications
Laws & Regulations
Monetary Policy
Help Desk
SBP Videos
Feedback
Contact us
What's New?
Speeches
Online Tenders
Web Links

Educational Resources
Regulatory Returns
Library
Rupey ko Pehchano
Events
Zahid Husain Memorial Lecture
Careers
Sitemap
 
Best view Screen Resolution : 1024 * 768
Copyright © 2016. All Rights Reserved.