All
Authorized Dealers
in Foreign Exchange,
Dear
Sirs,
FOREIGN
CURRENCY ACCOUNTS
As
announced by the Prime Minister, the foreign currency accounts
frozen on 28th May, 1998 stand revived with effect from
1st July, 1998. Now therefore, in pursuance of the decision
of the Prime Minister, and in super session / modification
of F.E. Circular Nos. 12, 17, 18, and 25
of 1998, the following clarifications are issued in the
operation of foreign currency accounts.
-
All
immunities in relation to the foreign exchange referred
to in para 2 of Foreign Exchange (Temporary Restrictions)
Ordinance, 1998 stand restored for an indetinite period
both for old and new foreign currency accounts as well
as for the amounts that have been or will be converted
into rupees. The Government is in the process of providing
the necessary legal cover to this effect.
-
The
State Bank will continue to provide exchange risk coverage
to the balances held in the old foreign currency accounts
as on 30-06-1998 as well as additional foreign currency
deposits flowing to these accounts on regular payment
of forward cover fee as determined by the State Bank
of Pakistan.
-
The
foreign currency deposits as on May 28, 1998 can continue
to be converted in rupees at the exchange rate, but
restrictions on their withdrawal in foreign exchange
will continue. Amounts of incremental deposits after
July 1, 1998 could be withdrawn in foreign exchange,
although the Prime Minister has appealed to all such
depositors to keep even the incremental amount in their
accounts as far as possible.
2.
A new foreign currency deposit scheme under new rules was
announced on 26-06-1998 vide F.E. Circular No. 25 of 1998. This scheme will
continue to operate concurrently. Under the rules of this
scheme.
-
residents
and non-residents can open foreign currency accounts
will banks in Pakistan.
-
banks
are not under obligation to surrender the foreign currencies
received in these accounts to the State Bank; and
-
no
forward cover on deposits received under this scheme
will be provided by the State Bank.
3.
Borrowing facilities against the security of balances held
in the foreign currency accounts / certificates as on 30-06-1998
has been withdrawn. The banks / NDFL will meet this requirement
by July 31, 1998. A separate circular is being issued on
the subject.