Please refer to the instructions issued vide F.E. Circular No.1 dated January 20, 1998 whereby the Authorized Dealers were allowed to determine their own rates of exchange for foreign currencies other than U.S. dollar. It has now been decided that with effect from 24^th March, 1998 the State Bank will widen its buy / sell spread for U.S. dollar / rupee exchange rates for transactions with their customers within this band.

2. As a consequence of the above, the condition of purchase of U.S. dollar by the importers from an Authorized Dealer opening the letter of credit / registering the contract / proforma invoice / purchase order etc. has also been dispensed with. Accordingly, the importers will be free to purchase U.S dollar for imports, in ready or forward, from any Authorized Dealer like other foreign currencies subject to the procedure and stipulations contained in F.E. Circular No.1 of 1998.

3. Likewise, the instructions contained in para 7 of the said F.E. Circular applicable for sale of foreign currencies, other than U.S. dollar, by the exporters to the Authorized Dealers will ipso-facto apply to U.S. dollar also.

4. As different Authorized Dealers will quote different exchange rates for U.S. dollar like other currencies, it has been decided to discontinue publication of Authorized Dealers’ spot rates for U.S. dollar for public and U.S. dollar bill buying rate by the Foreign Exchange Rates Committee with effect from the 24^th March, 1998. In view of the foregoing, each Authorized Dealer will itself fix the export bill buying rates. The discount rate to be used for calculating the bill buying rate shall be the U.S. dollar LIBOR for the relevant tenure + 2%.