SBP Clarifies Confusion On FOREX Account Regulations
After the issuance of Statutory Regulatory Orders by the Government of Pakistan on foreign currency accounts, the State Bank of Pakistan released a statement on Sunday clarifying nothing has changed.
In a circular issued by the SBP, it is stated, “There has been no change in the general or special permissions given by the State Bank to individuals under the foreign exchange regulations”.
On October 6th, GoP announced new Foreign Currency Account Rules under the Economic Reforms Act, 1992.
The rules suggested that depositing the Foreign Exchange that was purchased from the open market into Foreign Currency Accounts is banned henceforth but Return Filers can still deposit the Foreign Exchange purchased in the open market, which created confusion.
Therefore, the central bank had to issue a circular to clarify that the rules announced by GoP are the same as previous laws in the Foreign Exchange Manual of SBP.SBP said, “According to paragraph IV, Chapter 6 of the Foreign Exchange Manual, foreign currency accounts can be fed by remittances received from abroad, travelers’ cheques issued outside Pakistan and encashment of securities issued by Govt. of Pakistan. A foreign currency account of a citizen of Pakistan resident in Pakistan can also be fed with cash foreign currency only if the account holder is a filer as defined in Income Tax Ordinance, 2001,”
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They further added, “The recently issued rules aim to provide a regulatory framework for the operation of individual foreign currency accounts. Such a framework represents a continuation of the State Bank of Pakistan’s efforts to strengthen the foreign exchange regime and make it more market-oriented. Looking ahead, SBP will continue to take steps to facilitate greater use of banking channels for individuals to meet all their foreign exchange needs.”