KARACHI: The State Bank of Pakistan (SBP) has revised key foreign exchange instructions to facilitate the import of crude oil, petroleum products and liquefied natural gas (LNG), as Pakistan navigates rising geopolitical tensions linked to the ongoing Iran conflict.
In a notification, the central bank announced amendments to its Foreign Exchange Manual (FEM), specifically updating procedures related to financial instruments under the Pakistan Single Window (PSW) system and guarantees issued on behalf of residents in favour of non-residents.
The SBP said the changes aim to ensure smoother import financing and uninterrupted energy supply by allowing authorised dealers greater flexibility in issuing Financial Instruments (FI) and Standby Letters of Credit (SBLC).
Under the revised framework, banks are now permitted to issue financial instruments for crude oil and petroleum imports at the time of contract registration. Similarly, SBLCs can now be issued for imports of crude oil, petroleum products and LNG without additional procedural delays.
The central bank also amended relevant sections of Chapter 13 and Chapter 19 of the FEM to reflect these changes, integrating them with Pakistan’s digital trade facilitation system under PSW.
According to the revised rules, authorised dealers must communicate import transaction details through electronic data interchange systems and ensure all financial instruments are properly registered, tracked and matched with underlying contracts or letters of credit.
The SBP also introduced a structured numbering system for financial instruments, enabling better monitoring and transparency. Each instrument will include identifiers for the issuing bank, transaction type and issuance date.
In addition, banks retain the authority to amend or cancel instruments under defined conditions, provided adequate documentation is maintained and compliance requirements are met.
The central bank also clarified rules governing guarantees and standby letters of credit issued in favour of non-residents, stating that prior approval is required in most cases, except for specified import-related transactions.
