Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 33
March 28, 1994 

AAll Authorized Dealers
In Foreign Exchange,

Dear Sirs,


As Authorized Dealers are aware, at present State Bank of Pakistan undertakes forward buying / selling of U.S. Dollars from / to time for 6 / 12 months in connection with the transactions undertaken by them (Authorized Dealers) relating to exports and specified imports. It is proposed to discontinue the role of the State Bank and leave the short-term forward cover market to the Authorized Dealers. Initially, the Foreign Exchange Rates Committee will quote the forward buying and selling rates on the basis of premium / discount determined by it. After the banks gain adequate experience in the field, they may be allowed to quote their own rates. In the initial stage (s), the State Bank would be prepared to provide counter cover to Authorized Dealers for that portion of the transactions, which have not been covered in the inter-bank market, and as a consequence, remain open, at the same rate of premium at which forward covers are provided by the Authorized Dealers to the Customers.

2. In this connection, we enclose revised Chapter IV of the Foreign Exchange Manual (7th Edition – 1992) – Foreign Exchange Facilities – replacing the existing paragraph 1 to 12, 14 to 16 and 20 to 24 of the Chapter. The existing para 13, 17, 18 and 19 of this Chapter may be renumbered as 12,13,14 and 15 respectively.


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3. Attention of Authorized Dealers is also invited to para 9 Chapter V of the Foreign Exchange Manual (7th Edition – 1992). The aforesaid para may please be substituted by the following:-


"9. Authorized Dealers may freely buy and sell foreign currencies both ready and forward from and to Authorized Dealers in Pakistan provided such purchases / sales are backed by permissible transactions with their customers."


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