Exchange firms allowed forward sale

Published February 26, 2021
Forward sale facility may be availed up to maximum five working days (including both transaction and settlement days). — AFP/File
Forward sale facility may be availed up to maximum five working days (including both transaction and settlement days). — AFP/File

KARACHI: Exchange companies on Thursday were allowed to cover their risks against exports proceeds through forward sale transaction with banks up to five working days, the State Bank said in a circular.

To facilitate exchange companies in managing exchange rate risks associated with the realisation of export proceeds against export of permissible foreign currency notes, it has been decided that exchange companies may enter into forward sale transaction with banks up to five working days against export proceeds in US dollars.

According to the circular, exchange companies may sell forward the export proceeds received from abroad in US dollars to banks against the export of permissible foreign currencies made on consignment basis through cargo or security companies.

Forward sale facility may be availed up to maximum five working days (including both transaction and settlement days), it added.

President Forex Association of Pakis­tan Malik Bostan said that excha­nge companies had demanded the provision of forward cover facility which has been fulfilled.

“The SBP’s decision for providing risk cover through forward booking will bring stability in the exchange rate while the volume of exports proceeds would also increase,” he said.

“Once the restrictions over travelling of Pakistanis residing in the Middle East and other countries are lifted, the volume of currency exports and ultimately imports of US dollars will surely increase,” Mr Bostan said.

“During the current fiscal year, we expect to bring $3 billion export proceeds compared to $2.5bn in FY20,” he said.

According to the SBP circular, exchange companies are required to bring export proceeds within five working days from the date of shipment.

Published in Dawn, February 26th, 2021

Opinion

Border deaths
21 Apr 2021

Border deaths

Will the rulers be moved by the sight of Zamyad drivers dying of hunger?
Embracing informality
Updated 20 Apr 2021

Embracing informality

There are many cities that have experimented successfully in legalising and managing the street vendor business.

Editorial

More mishandling
Updated 21 Apr 2021

More mishandling

By its bad decision-making and weak management, the govt has allowed the TLP to garner more importance and heft than it deserves.
21 Apr 2021

Declining FDI

THE sharp decline in FDI in recent months is worrisome. New State Bank data shows that FDI has plummeted by a hefty...
21 Apr 2021

The digital divide

IN the Economist Intelligence Unit’s annual Inclusive Internet Index report, measuring internet inclusion in terms...
Media blackout
Updated 20 Apr 2021

Media blackout

A free flow of information is the best way to counter rumour-mongering and fake news.
20 Apr 2021

Gas utilities’ reluctance

THE government has ‘ordered’ state-owned gas companies SSGC and SNGPL to remove impediments hampering the...
20 Apr 2021

Saudi-Iran talks

EVER since the 1979 Islamic Revolution in Iran, ties between Tehran and Riyadh have been increasingly strained,...