The State Bank of Pakistan (SBP) has decided to increase the maximum cap on aggregate foreign exchange exposure limit for authorised dealers by Rs500 million to Rs2.5 billion with effect from May 16, said an SBP circular issued on Thursday.
SBP said that the increase in maximum cap for the dealers was being implemented in accordance with the changed market conditions and trade volumes. Based on review of annual audited accounts, the foreign exchange exposure limit for each dealer would be advised separately, it said.
At present, the foreign exchange exposure limit for the authorised dealers is being calculated at 20 per cent of their paid-up capital (free of losses) with a maximum cap of Rs2 billion, which has now been increased to Rs2.5 billion.
However, SBP said it reserved the right to set the foreign exchange exposure limit for any dealer below 20 per cent of the paid-up capital based on the trends observed in utilisation of the limit.
Published in The Express Tribune, May 13th, 2011.