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SBP Sets New Limits on Foreign Currency Companies

by Newsweek Pakistan

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Central bank bars companies from selling more than $10,000/day or $100,000/year in foreign currency to individuals

The State Bank of Pakistan (SBP) on Sunday amended regulations regarding the purchase of foreign currency, mandating all foreign exchange companies to ensure that no single individual purchases more than $10,000 per day and $100,000 per calendar year—or its equivalent in other currencies—in the form of cash or outward remittances.

Stressing that the new rules were intended to improve “documentation and transparency and to further strengthen the foreign exchange regulatory regime,” a statement issued by the central bank said that they had been included the Exchange Companies’ Manual that sets out the scope of business of exchange companies.

Explaining the limits imposed on individuals seeking to purchase foreign currencies, the SBP said they had determined by factoring in personal needs for foreign exchange. It said that they did not affect educational and medical expenses, noting that people could sent up to $70,000 per calendar year abroad, and $50,000 per invoice from banks, per existing regulations for such requirements.

People who need to exceed these limits, read the statement, could approach the Foreign Exchange Operations Department of the SBP Banking Services Corporation through their bank for relief. There had been no change in regulations with respect to foreign currency accounts of individuals.

The SBP statement said that exchange companies would also now need to obtain supporting documents against the sale of foreign exchange exceeding $1,000 (or equivalent) to substantiate the purpose of the transaction. Similarly, companies are barred from performing transactions against authority letters.

The central bank also stressed that exchange companies “shall perform transactions only at authorized outlets of the company and shall not provide delivery services to the customers.”

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