1. EXCHANGE & DEBT MANAGEMENT DEPARTMENT USERS-PRODUCERS WORKSHOP State Bank of Pakistan Karachi. May 08, 2006 Faisal Maqsood Joint Director – Foreign Exchange Markets Exchange & Debt Management Department “Foreign Exchange Rates” Data Compilation and Dissemination

2. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Presentation Outline  Current Exchange Rate System.  Exchange Rate data compiled by SBP.  Different types of Exchange Rates issued by SBP.

3. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Exchange Rate System  Since May 1999, the official Exchange Rate has been abolished.  State Bank has discontinued issuing the Official Exchange Rate.  Under the new Exchange Rate System, any Bank holding the license of an Authorized Dealer is free to quote its own Exchange Rate against various foreign currencies.

4. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Floating Interbank Foreign Exchange Rate  The term “Floating Interbank Exchange Rate - FIBR” is primarily used for Exchange Rate applicable to Foreign Exchange transactions between Commercial Banks in the “Interbank Foreign Exchange Market”.  The “Interbank Foreign Exchange Market” comprises of Commercial Banks having demand or supply of Foreign Exchange to cover transactions carried out with their Commercial Clients.

5. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Banks’ Exchange Rates for Commercial Clients  For Commercial Clients, Banks are free to quote any Exchange Rate depending upon FIBR, their own liquidity and commercial objectives.  Banks typically issue their daily Exchange Rate sheets for commercial clients which provide the buying/selling Exchange Rate of various Foreign Currencies.  The Exchange Rate quoted by a Bank e.g. National Bank of Pakistan will be relevant only for NBP’s customers and may differ from the Exchange Rate quoted by any other Bank.

6. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Exchange Rate Data Compilation at SBP  State Bank of Pakistan collects Exchange Rate data from various market sources e.g. Banks, Interbank Brokerage Houses, REUTERS etc.  On the basis of the data collected, SBP compiles different types of Exchange Rate for specific purposes.

7. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Data Compilation at SBP 1. Conversion Rates for Foreign Currency Deposits etc. 2. Exchange Rates for Mark-to-Market Revaluation of Banks. 3. Weighted Average Exchange Rate. Presently, SBP is compiling three types of Exchange Rates:

8. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Data Compilation at SBP (I) Conversion Rates for Foreign Currency Deposits PURPOSE Conversion of Foreign Currency Deposits, DBCs, FCBCs, Special US Dollar Bonds and profit thereon as per SBP Circular No. 08 of 1999. FREQUENCY Daily BASIS Average of closing Exchange Rates in the Interbank Market. CURRENCIES US Dollar, Euro, Yen, Pound Sterling ISSUANCE News papers, SBP website, REUTERS, BLOOMBERG etc.

9. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Data Compilation at SBP (II) Exchange Rates for Mark-to-Market Revaluation PURPOSE Mark-to-Market Revaluation of Commercial Banks as per SBP Circular No. 02 of 1999. FREQUENCY Daily BASIS Average of closing Exchange Rates in the Interbank Market. CURRENCIES 28 Currencies ISSUANCE REUTERS, BLOOMBERG, SBP’s website.

10. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Data Compilation at SBP (III) Weighted Average Exchange Rate PURPOSE 1)For SBP’s internal usage. 2)For provision of Foreign Exchange to Banks handling the oil payments. 3)Provision to various Govt./Multilateral institutions as per their request. FREQUENCY Daily BASIS Weighted Average of the Exchange rates sheets issued by Commercial Banks for their Commercial Clients. CURRENCIES US Dollar, Euro, Yen, Pound Sterling, Swiss Franc ISSUANCE Upon request.

11. EXCHANGE & DEBT MANAGEMENT DEPARTMENT Thank You