All
Authorised Dealers
in Foreign Exchange,
Dear
Sirs,
CONVERTIBLE
RUPEE ACCOUNTS AND FORWARD SALE/PURCHASE
In
order to prevent speculative deals by non-residents, paragraph
8 of Chapter
VII of the Manual is deleted. With the deletion
of the said para, sale of foreign currencies to non-resident
bank branches and correspondents against credit balance(s)
available in their non-resident rupee account would require
prior approval of the Sate Bank. Non-resident bank branches
and correspondents may, therefore, be advised to fund their
non-resident rupee accounts only to the extent required
for effecting authorized payment to beneficiaries in Pakistan.
2.
Authorized Dealers are also advised to ensure that "Special
Convertible Rupee Accounts" of non-residents, opened
in terms of instructions contained in paragraph
8, Chapter XX
of the Manual are not used for speculation in respect
of exchange rate of the rupee ad that only such credits
and debits are allowed which relate to permitted trading
in shares and securities and receipt of dividends/profits
and repatriation of disinvestment proceeds and dividends/profits.
3.
Attention of the Authorized Dealers is invited to paragraph
7(I) of FE
Circular No. 8
dated the 18th
May, 1999 regarding
forward cover contracts by the Authorized Dealers with the
State Bank prior to 19th May, 1999. Their attention
is also invited to paragraph
9 Chapter
IV of the Foreign Exchange Manual and Sub-Section(2)
of the Section 4 of the Foreign Exchange Regulation Act,
1947 in terms of which the State Bank is vested with the
powers to direct to close out forward contract at the rate
ruling on the date on which they were booked. In cases where
importers have established L/Cs for import of wheat against
contracts on C&F Free Out basis without the prior approval
of the State Bank, such contracts shall be required to be
closed out at the rate ruling on the date on which they
were booked. The Authorized Dealers will close out their
relevant contracts with the State Bank on the same basis.
4. In order
to prevent speculation by importers and exporters, banks
are instructed that in case of closing out of forward sale
contract with customers where underlying LC has been cancelled
or has expired un-utilized, the spot rate for counter transaction
would be lower of those prevailing on the date of booking
of the contract and the date of close out. Similarly in
case of closing out of forward purchase contract with the
customers where underlying LC/export contract has been cancelled
or has expired un-utilized, the spot rate for counter transaction
would be higher of those prevailing on the date of booking
of the contract and the date of close out.