The State Bank of Pakistan (SBP) has announced a relaxation of regulations for exporters, allowing them to freely utilize funds in their Special Foreign Currency Accounts (ESFCAs) for various business-related payments abroad without requiring prior approval from the central bank.
This move aims to enhance the ease of doing business and stimulate the export sector.
The new guidelines, communicated to the heads of all foreign exchange authorized dealers, signify a broader effort to support exporters by permitting the use of retained export proceeds for current account transactions related to their businesses.
Additionally, exporters can now request debit cards linked to their ESFCAs, facilitating easier access to their funds.
Previously, the SBP permitted exporters to retain a portion of their earnings in foreign currency accounts, with general exporters allowed to keep 10-15% and those in the freelancing, information technology, and software sectors up to 50% of their export proceeds.
Under the revised framework, exporters are empowered to use their funds for a variety of purposes, including import payments, acquisition of IT and digital services, dividend repatriation, marketing activities, salary payments to foreign employees, overseas investments, and foreign debt repayments.
However, usage of these funds within Pakistan in foreign currency is prohibited; they must be converted to local currency for domestic expenditures.
The policy update clarifies and expands the scope of permissible expenditures for exporters, addressing previous ambiguities and enhancing their ability to engage in international business activities effectively.
This liberalization is expected to facilitate exporters in expanding their market reach and operational capabilities abroad.
The central bank has also specified that exporters may transfer funds between their ESFCAs held at different authorized dealers, subject to regulatory compliance.
The measures are designed to streamline financial operations for exporters, promoting growth in Pakistan’s export sector amid challenging global economic conditions.
Ok but is there any policy framed by SBP that would benefit the common man? Are all facilities for only traders and those who are privileged? Whosoever has a foreign currency account should be free to use his/her money as they like. Will SBP tell them what to use it for?
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Well, isn’t the ordinary guy going to gain from any policies made by SBP? Do only traders and the wealthy have access to all the facilities? It is only fair that those who have access to foreign currency accounts be able to spend it anyway they choose. Can they expect SBP to instruct them on its purpose?