AAll Authorized Dealers
In Foreign Exchange,

Dear Sirs,

PRIVATE SECTOR DIRECT BORROWINGS INCLUSIVE OF SUPPLIERS CREDITS / GUARANTEED LOANS / PAYE LOANS – ABSORPTION OF EXCHANGE RISK BY THE GOVERNMENT AGAINST PAYMENT OF FEE

Attention of Authorized Dealers is invited to F.E. Circular No. 76 dated the 18th October, 1984 as amended through F.E. Circulars issued from time to time in terms of which State Bank of Pakistan has been providing on behalf of the Federal Government exchange risk coverage to the Private Sector direct borrowings inclusive of suppliers credit / guaranteed loans / PAYE loans.

2. It has been decided to wind up the scheme with immediate effect. As a consequence, State Bank of Pakistan will not henceforward receive any application for registration of exchange risk coverage option. The valid requests for registration of State Bank of Pakistan before the date of issue of this circular will, however, be entertained in accordance with the provisions of the relevant F.E. Circulars. It is further clarified that even after winding up of the scheme, State Bank of Pakistan will continue to provide exchange risk coverage in respect of the loans where the options were validly registered by the State Bank of Pakistan before the date of issue of this F.E. Circular.

3. The State Bank will have no objection if an Authorized Dealer wants to extend forward cover in such cases on rollover basis.

4. Please bring the above to the notice of your constituents