Circulars/Notifications - Exchange Policy Department  
 F.E. Circular No. 48
June 12, 1994 

AAll Authorized Dealers
In Foreign Exchange,

Dear Sirs,


Please refer to F.E. Circular No. 33 dated the 28th March, 1994 read with F.E. Circular No. 46 dated the 26th May, 1994 on the above subject.

2. It has since been decided that with effect from 30th June, 1994 State Bank of Pakistan will not provide forward cover to the Authorized Dealers against forward covers provided by them to their customers on account of import, export and reportable loans etc.

3. Authorized Dealers may at their discretion provide covers to their customers for imports / exports and reportable loans provided their 'open position' permits them to do so, as the Authorized Dealers should maintain square or near square exchange position. The terms and conditions for booking of forward covers by the Authorized Dealers will be the same as embodied in Chapter IV of the Foreign Exchange Manual circulated vide F.E. Circular No. 33 dated the 28th March, 1994 read with F.E. Circular No. 46 dated the 26th May, 1994. The existing para 25 of Chapter IV of the Foreign Exchange Manual (7th Edition, 1992) may be renumbered as 16.


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4. The premium / discount at which forward cover is made available to the customers may be determined by the individual Authorized Dealer. However, State Bank of Pakistan will have no objection in case the Authorized Dealers collectively assign the job of determining the premium / discount rates on forward covers and publication of the forward rates to the Foreign Exchange Rates Committee.

5. The forward cover contracts booked by the Authorized Dealers with State Bank of Pakistan upto the 29th June, 1994 can be taken up / closed out during / on their respective maturates.

6. State Bank of Pakistan will, however, continue to undertake spot purchase / sale of U.S. Dollar from / to the Authorized Dealers, and will continue to announce the rates for spot transactions in U.S. Dollar by the State Bank and the Authorized Dealers.

7. The existing arrangement of U.S. Dollar  /   Pound Sterling / J.Yen / D.M. swaps and provision of forward covers by State Bank of Pakistan on payment of the prescribed fee by the Authorized Dealers under the Foreign Currency Accounts Scheme will also continue.

8. It is clarified that those persons who in accordance with the existing regulations are under obligation to surrender foreign exchange to authorized dealers, shall continue to be under such obligation.


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