The Chief Executives of

All Exchange Companies

Dear Sirs / Madam,

Nostro Accounts with Exchange Companies Abroad and Sale of Foreign Exchange in the Interbank Market

In view of the difficulties at the initial stage in opening of Nostro Accounts with the banks abroad, the Exchange Companies were allowed to open Nostro Accounts with Exchange Companies abroad for related purposes.

It has now been decided that all such Nostro Accounts with Exchange Companies abroad will be closed latest by 25th July 2006.

Accordingly, FCYs on account of home remittances or against export of foreign currencies (other than US $) should either be received in Exchange Company’s Nostro Accounts with the Banks abroad or in FCY A/Cs maintained with Banks in Pakistan.

Exchange Companies will be further required to report, on transaction-to-transaction basis, with the relevant dates of export of foreign currencies (other than US $) and date of receipt of credit, the name of branch & the bank.

It has also been decided that as from 10th of July, 2006 (inclusive), all Exchange Companies shall ensure that a minimum of 10% of foreign currencies exported by them and a minimum of 10% of foreign currencies received by them on account of inward home remittances, in equivalent US $, must invariably be sold in the interbank market on an ongoing basis.

A report as of last day of the month must be submitted to this department by every Exchange Company, giving aggregate FCY amounts mobilized under the above two categories and amounts sold in the interbank market along with the name of the counter parties & relevant dates.

Failure to comply with the above instructions will be dealt with strictly under related rules & regulations.