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SAZH-TAF Report on FDI

Economic - Foreign Exchange

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While it was agreed that repeal of the Foreign Exchange Act, 1947 would not be practical, what could be executed was a surgery of the Foreign Exchange Manual to allow better clarity and consistency, with existing policies. According to our members, in practice, the FEM has stayed the same, yet SBP has continually changed when or how to send money based on whatever policy is in vogue at the time. It was suggested that this be discouraged, and using the FEM, which investors and experts were familiar with, plan a remittance strategy that can be implemented. This would further result in consistency in policy and ability of various sectors like power and telecom, who are largely governed by foreign investors to devise a remittance plan in line with the amended FEM.

 

It was thus suggested that with BOI as the feedback and coordination nexus, begin a consultation process in which various economists, businesses and other stakeholders could amend the Foreign Exchange Manual, and a consistent policy framework be devised with the Ministry of Finance and State Bank of Pakistan, to allow remittances and stabilize the currency.

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