Karachi August 31 2023: State Bank of Pakistan increases the rate of remuneration for the month of September 2023 on the Special Cash Reserve Account (US$) maintained by commercial banks with the State Bank of Pakistan by 1 basis points.
After this increase the remuneration rate increases to 4.33 percent, while the rate on same account was 0.79% in July 2022. This is the highest rate of remuneration since December 2006.
In order to liberalize the foreign exchange regime the central bank allows banks / NBFIs to freely utilize Foreign Currency Deposits mobilized under F.E. 25 for lending/investment/placement in Pakistan and /or abroad. Such deposits if maintained abroad will not count towards banks’ Nostro Limits.
Accordingly, the State Bank has further decided that every bank / NBFI shall be required to maintain cash reserves in US$ equivalent to not less than 25% of their total FE 25 deposits with 5% in Cash Reserve Account and remaining in Special Cash Reserve Account (US $).
The reserves shall be kept in two separate accounts opened and maintained at the concerned office of the State Bank. While the cash reserve account, which is 5% will be non-remunerative, special cash reserve account will be remunerated by State Bank on daily product basis on rates notified by our Exchange & Debt Management Department at the end of each month. The rates so announced shall be effective for the following month. The banks / NBFIs may approach our Accounts Department for opening of the said accounts.
For the purpose of determining of reserve requirements, all deposits mobilized under FE 25 in foreign currencies other than US$, will be converted in US$ at the closing rates of exchange prevailing on the first day of each month of the respective banks / NBFIs. For any subsequent deposits, the prevailing exchange rates on the date of such deposits will apply.
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