In
order to provide support to the market under the new regime
of two tier Exchange Rate Mechanism advised vide our F.E.
Circular No. 38 dated : July 21, 1998 SBP has decided
to open forward foreign exchange window for authorised
dealers so that they can freely accommodate their clients
in providing forward sale/purchase facility.
2.
Effective July 22, 1998 following exchange rates shall
apply for transactions falling under Tier (1) i.e. the
OFFICIAL EXCHANGE RATE category :-
State
Bank of Pakistan Rates for Authorised Dealers per USD
|
Buying
Rates |
Selling
Rates |
SPOT
|
46.00 |
46.23 |
1
Month |
46.35 |
46.62 |
2
Months |
46.69 |
47.00 |
3
Months |
47.04 |
47.39 |
4
Months |
47.38 |
47.77 |
5
Months |
47.73 |
48.16 |
6
Months |
|
48.54 |
Authorised
Dealers Rates for Customers Per USD
|
Buying
Rates |
Selling
Rates |
SPOT
|
45.95 |
46.28 |
1
Month |
46.30 |
46.67 |
2
Months |
46.64 |
47.05 |
3
Months |
46.99 |
47.44 |
4
Months |
47.33 |
47.82 |
5
Months |
47.68 |
48.21 |
6
Months |
48.02 |
48.59 |
PROCEDURE
FOR DELIVERY
FORWARD
SALE / PURCHASE RATES
SBP
as well as the Authorised Dealers (Ads) forward contracts
shall specifically mention period of delivery, including
the option period. In case maturities of forward contracts
fall on non-working days, the maturity of the contract
(both sale and purchase) would fall on the next business
day.
- FORWARD
SALE TO SBP
All
SBP forward purchase contracts with Ads will have a last-month
option. However contracts between ADs and their clients
can have longer option periods or can be for fixed delivery.
All forward contracts shall show the price, and delivery
period during which contract can be taken up by the relevant
purchaser. For instance, an AD approaches the SBP on July
28, 1998 to sell 6 month forward with last month optional
delivery. The SBP will buy USD from the AD at the 5-month
forward buying rate i.e. @ 47.73. The delivery of US$
will be between December 28, 1998 and January 28, 1999.
-
Fixed
Contract: If an Exporter sells 1 month forward
to AD on July 28, 1998, he will be quoted price of
46.30. Contract from AD will indicate delivery as
August 28, 1998.
-
Optional
Contract: If an Exporter sells 1 month forward
to AD on July 28, 1998, he will be get the spot Rate
i.e. price of 45.95. Contract from AD will show delivery
between July 28, 1998 upto August 28, 1998. Likewise
if an Exporter sells 3 months forward to AD on July
28, 1998, he will get a price of 46.64. Contract from
AD will indicate delivery between September 28, 1998
upto October 28, 1998.
-
FORWARD
PURCHASE FROM SBP
All
SBP forward contracts with ADs will have a last-month
option. However contracts between ADs and their clients
can have longer option periods or can be for fixed delivery.
All forward contracts shall show the price, and delivery
period during which contract can be taken up by the
relevant purchaser. For instance, and AD approaches
the SBP on July 28, 1998 to buy USD 6 month forward
with last month optional delivery. The SBP will sell
him USD @ 48.54 and the delivery of US$ will be between
December 28, 1998 and January 28, 1999.
-
EXPORT
BILL DISCOUNTED
In
case of Usance export bills discounted by AD, the AD
will enter into a forward sale contract with SBP for
the respective tenor. For instance, AD discounts 60
days usance bills for USD 100,000/= on July 28, 1998.
Since ADs are required to surrender 50% of the export
proceeds to SBP at the Official Exchange Rate, they
will enter into a 3 month forward Contract with SBP
with last month optional. The rate applicable will be
the 2-month SBP Buying rate, i.e. Rs. 46.69 per USD
for US$ 50,000. Upon realization of proceeds of the
bill they will deliver USD 50,000/= to SBP and obtain
PKR from the respective office where they registered
the forward Contract.
-
NEGOTIATION
OF BILLS ON SIGHT
In
case of sight documents negotiated by AD, 50% of the
amount of negotiation shall be sold in ready by the
AD to SBP at SBP official buying rate, i.e. 46.00. There
will be no further surrender upon receipt of the proceeds
of the Bill.
-
FORWARD
CONTRACTS FOR CURRENCIES OTHER THAN USD
SBP
undertakes transactions in U.S. Dollar only. Therefore,
all transactions concluded by ADs in currencies other
than the U.S. Dollar, will be converted by the AD into
the equivalent US Dollar amounts, for onward sale /
purchase to / from the SBP at the relevant conversion
rate as determined by them.
-
PARTIAL
DELIVERY
Partial delivery of all forward contracts
during the option period is permissible.