CHAPTER
V
OREIGN
CURRENCY ACCOUNTS OF AUTHORISED DEALERS AND SALE OF FOREIGN CURRENCIES
-
Introduction.
-
Accounts
in Foreign Currencies.
-
Foreign
Currency held at the disposal of the State Bank.
-
Exposure
Limits and Nostro Limits.
-
Calculation
of Exposure Limits.
-
Exchange
Exposure Position.
-
Purchase
and sale of Foreign Currencies.
-
Inter-bank
transactions.
-
Purchase
of U.S. Dollars from and their sale to the Authorised Dealers
by the State Bank.
-
Purchase
and sale of Foreign Currency from and to
Banks’
Overseas Branches and Correspondents.
1.
Introduction.
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 verall 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.
8. Inter-bank transactions.
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
Branches and Correspondents.
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.
|