SBP maintains rate of Special Cash Reserve Account at 4.19% for July'23

July 03, 2023 (MLN): The State Bank of Pakistan (SBP) on Monday decided to maintain the rate of remuneration for the month of July 2023 on the Special Cash Reserve Account (US$) at 4.19%, the circular issued to all authorized dealers in foreign exchange revealed.

"It is notified that the rate of remuneration for the month of May 2023 on Special Cash Reserve Account (US$) maintained with the State Bank of Pakistan will be 4.19%," the circular read.

On March 31, 2021, in order to further liberalize the foreign exchange regime it had been decided to allow banks / NBFIs to freely utilize Foreign Currency Deposits mobilized under F.E. 25 for lending/investment/placement in Pakistan and /or abroad with effect from 2nd April 2001.  Such deposits if maintained abroad will not count towards banks’ Nostro Limits. As a sequel to this, restrictions imposed by our Exchange Policy Department vide their FE circular No 13 of 1999 stand withdrawn to this extent.

Accordingly the State Bank, in the exercise of the powers conferred on it under Section 36(1) of the SBP Act 1956, had further decided that effective 2nd April 2001, every bank / NBFI shall be required to maintain cash reserves in US$ equivalent to not less than 25% of their total FE 25 deposits on a daily basis with State Bank in the following manner:

1. 5% Cash Reserve Account  (US $)

2. Special Cash  Reserve Account  (US $)

The reserves shall be kept in two separate accounts opened and maintained at the concerned office of the State Bank.

" While the cash reserve account will be non-remunerative, special cash reserve account will be remunerated by State Bank on daily product basis on rates notified by our Exchange & Debt Management Department at the end of each month," the notice read.

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