KARACHI: After 10 years, the State Bank has once again allowed the exchange companies to bring in US dollars directly in baggage or in their accounts against the sale of foreign currencies abroad.
“This arrangement shall remain in operation from Aug 3 to Oct 15 unless advised otherwise or until further instructions,” said the State Bank.
Currency dealers said the decision will immediately improve dollar supply in the market, reduce dollar demand, bring down difference in dollar rates in open/inter-bank and will bring stability in the exchange rate.
“Exchange companies were banned in April 2005 to bring dollars into the country and were bound to send dollars through TT (telegraphic transfer- through banks),” said Zafar Paracha, Secretary, Exchange Companies Association of Pakistan.
However, the State Bank has made it mandatory to bring dollars only through Jinnah Airport, Karachi.
“Dollar currency notes can be imported only through Jinnah International Airport (JIAP) Karachi. Thus ECs (exchange companies) exporting foreign currencies from Karachi, Lahore or Islamabad airports will bring into Pakistan cash (US dollars) only through JIAP Karachi,” said a State Bank circular issued on Monday.
Earlier, on July 24, the State Bank governor met the currency dealers, along with President, Forex Association of Pakistan, and asked the reasons for sudden rise in dollar prices since the dollar rose to Rs103.40 in the open market.
“The State Bank was told that since July 14 and due to Eid, banks did not supply dollars to the exchange companies which created their shortage, thus prices started crawling up,” said Malik Bostan, President, FAP, adding that the State Bank asked banks to immediately supply dollars to the exchange companies.
Bostan said the demand was high because 0.3 million Pakistanis will leave the country within 45 to 50 days for Hajj and they are buying dollars and Saudi Riyals.
The State Bank’s circular said the ECs may also continue to export permissible foreign currencies against repatriation of equivalent US dollars in their foreign currency accounts maintained with banks in Pakistan as per existing procedure.
“US dollars must be brought into Pakistan within two working days from the date of export of foreign currencies. The practice of repatriation of USD through credit to bank accounts of EC with banks in Pakistan will remain unchanged,” said the circular.
The exchange company will give prior written intimation to relevant SBP-Customs Joint Booth staff of Karachi, Lahore or Islamabad airports at the time of export of foreign currencies clearly mentioning the amount of cash US dollars to be imported, flight number and time of arrival of flight at Karachi with a copy to Director EPD, SBP and Director FEOD, SBP BSC.
For each export consignment, a Unique Transaction Number (UTN) will be mentioned. The UTN will be combination of alpha initials of name of EC, transaction number and financial year. The UTN for export of currencies will be centrally maintained by EC and issued by its head office for export of foreign currency currently allowed from Karachi, Lahore and Islamabad airports.
The UTN will be the reference number for future reconciliation of export and import transactions of the EC. A specimen of UTN should be used by an EC for the purpose of record keeping and related instructions of this circular.
Representatives of ECs will declare the import consignment of cash (US dollars), upon their arrival into Pakistan, to the SBP staff at SBP booth located at International Arrival Lounge of JIAP, Karachi, along with original deal ticket of foreign bank/exchange company clearly showing the amount of cash USD.
Only those incoming flights must be chosen which are scheduled to arrive at JIAP, Karachi, between 10:30am and 06.30pm from Monday to Saturday, said the SBP.
ECs must ensure due diligence and compliance to all relevant Anti-Money Laundering laws in respect of cross-border transfers, which may be enforced from time to time in Pakistan as also in the respective jurisdiction from where US dollars are imported.