Circulars/Notifications - Exchange Policy Department  
 FE Circular No. 11 of 2008

December 19, 2008

The Head/Principal Offices of all
Authorized Dealers in Foreign Exchange

Dear Sirs/Madam,


Attention of the Authorized Dealers is invited to various instructions including those contained in FE Circular No. 46 dated November 15, 1995 regarding Asian Clearing Union (ACU) Mechanism.

It has been decided to include ACU Euro as the second ACU currency alongwith USD w.e.f. 1st January, 2009. The ACU Euro would be equivalent in value to one Euro. Accordingly, transactions under ACU Mechanism, in addition to ACU Dollar (ACUD), may also be denominated and settled in ACU Euro (ACUE) effective 1st January 2009. In this regard, authorized dealers may establish ACUE accounts with their correspondents in ACU member countries and open their correspondents’ ACUE accounts with them. The transactions in ACUE would be reported by the banks to SBP and settled by SBP separately i.e. independent of ACUD transactions. In other words, two separate accounting and settlement systems will be maintained; one for transactions conducted in ACU Dollar (ACUD) and the other one for the ACU Euro (ACUE).

Further, with a view to encourage the banks to maintain reasonable / sufficient balances in their accounts to ensure timely payments, the authorized dealers are hereby permitted to pay / receive interest, at their discretion, on ACUD and ACUE accounts as per mutually agreed terms and conditions. The balances of ACUD & ACUE accounts together with other FCY / Nostro accounts would however be subject to the overall exposure limits of the banks.

Other instructions on the subject will remain unchanged and will be equally applicable to the ACUE transactions and accounts.

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

Yours faithfully,

(Syed Samar Hasnain)

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