AIRLINK 60.84 Increased By ▲ 1.14 (1.91%)
BOP 6.32 Increased By ▲ 0.06 (0.96%)
CNERGY 4.32 Increased By ▲ 0.05 (1.17%)
DFML 15.91 Increased By ▲ 0.21 (1.34%)
DGKC 69.12 Decreased By ▼ -0.08 (-0.12%)
FCCL 18.11 Decreased By ▼ -0.24 (-1.31%)
FFBL 26.37 Decreased By ▼ -0.38 (-1.42%)
FFL 9.18 Decreased By ▼ -0.10 (-1.08%)
GGL 10.21 Decreased By ▼ -0.09 (-0.87%)
HBL 117.06 Increased By ▲ 1.16 (1%)
HUBC 114.31 Decreased By ▼ -0.09 (-0.08%)
HUMNL 6.87 Increased By ▲ 0.07 (1.03%)
KEL 4.87 Decreased By ▼ -0.02 (-0.41%)
KOSM 5.36 Increased By ▲ 0.71 (15.27%)
MLCF 38.50 Increased By ▲ 0.11 (0.29%)
OGDC 123.33 Decreased By ▼ -1.97 (-1.57%)
PAEL 21.78 Increased By ▲ 0.22 (1.02%)
PIAA 11.80 Increased By ▲ 0.93 (8.56%)
PIBTL 6.08 Increased By ▲ 0.06 (1%)
PPL 113.07 Decreased By ▼ -1.03 (-0.9%)
PRL 28.22 Increased By ▲ 0.32 (1.15%)
PTC 11.39 Increased By ▲ 0.49 (4.5%)
SEARL 51.91 Increased By ▲ 0.21 (0.41%)
SNGP 67.35 Decreased By ▼ -0.91 (-1.33%)
SSGC 11.29 Decreased By ▼ -0.13 (-1.14%)
TELE 7.78 Decreased By ▼ -0.02 (-0.26%)
TPLP 11.54 Decreased By ▼ -0.06 (-0.52%)
TRG 71.72 Decreased By ▼ -1.15 (-1.58%)
UNITY 23.04 Decreased By ▼ -0.51 (-2.17%)
WTL 1.29 Decreased By ▼ -0.01 (-0.77%)
BR100 6,717 No Change 0 (0%)
BR30 22,517 No Change 0 (0%)
KSE100 65,326 No Change 0 (0%)
KSE30 22,146 No Change 0 (0%)

KARACHI: The permission of import of cash US dollars by Exchange Companies (ECs) will increase the dollar inflows and reduce the difference between interbank market rate and the open market rate.

According to Syed Shabbar Zaidi & Co under the previous system Exchange Companies were allowed to export permissible foreign currencies and the equivalent sum was required to be repatriated to their foreign currency account. ECs were required to sell some 10 percent in the interbank market out of the total amount repatriated by them.

Under a new regime an additional right to import Cash US Dollars by the ECs has been introduced. Now, exchange companies are now allowed to import Cash USD Dollar against the export of permissible currencies.

ECs can import dollars in cash through cargo or security companies

According to Syed Shabbar Zaidi & Co, such cash imports is to be up to 50 percent of the foreign currency exported till December 31, 2023. The balance amount is required to be remitted in foreign currency account of the exchange company out of which 10 percent is to be sold to the interbank market.

As a result of this, the availability of cash in the US dollar will increase in the domestic market. In addition, the difference between interbank market rate and the open market rate will be reduced which is now a condition of the IMF agreement.

Under Chapter 5 of the Exchange Companies Manual (ECM) it is provided:

“General

(i) Exchange Companies are allowed to export all foreign currencies other than US Dollars on consignment basis through cargo/security companies. Prior approval from the State Bank is mandatory before starting the foreign currency export business.

(ii) All Exchange Companies shall ensure that a minimum of 10% of US Dollars received against export of foreign currencies are sold in interbank on an ongoing basis“

Furthermore it is stated that:

(xiv) Exchange Companies exporting permissible foreign currencies shall repatriate equivalent US Dollars in their foreign currency accounts maintained with banks in Pakistan within five working days from the date of export of foreign currencies.

(xv) Exchange Companies shall also open and/or maintain separate foreign currency accounts for receiving proceeds against export of permissible foreign currencies for reconciliation purposes. No other remittances and foreign currency cash shall be deposited in these accounts.

Now, through EPD Circular Letter No. 11 July 25, 2023- ‘Instructions Related to Import of Cash US Dollars’ an important amendment has been made in this Chapter and a new Clause 4 has been added which states as under:

4- Import of Cash US Dollars through Cargo/Security Companies

i. Exchange Companies, on a need basis, may import cash US Dollars against the value of their export consignments of permissible foreign currencies within five working days, through reputed cargo/security companies. This arrangement shall initially be in place till December 31, 2023 and will be subject to the condition that total cash US Dollars imported by an Exchange Company during this period shall not exceed 50% of the value of its export consignments.

ii. The Exchange Companies shall include such arrangements in their deal with the overseas entity. The system generated deal ticket shall also include particulars of the amount to be imported as cash US Dollars, if any, out of the total export consignment.

Copyright Business Recorder, 2023

Comments

Comments are closed.

Fazeel Siddiqui (Overseas Pakistani) Jul 27, 2023 01:50pm
Malik Bostan & gang is ready to provide millions of their hoarded/money laundered USDs to Actors who always use these unaccounted funds to meddle the elections to bring out predesigned parliament. By the way what problems currency exporters were facing to bring equal 100% proceeds through int'l banking channel in already non-cash-import regime? CFT/AML/KYC? And what currencies are exported & to whom? Afghani, TRY, MYR, INR, IRR, CNY, RUB or AED, EUR, SAR which are already in demand?
thumb_up Recommended (0)