SBP includes Japanese Yen to Asian clearing union mechanism

SBP includes Japanese Yen to Asian clearing union mechanism

KARACHI: State Bank of Pakistan (SBP) on Monday announced to include Japanese Yen to Asian Clearing Union (ACU) mechanism.

A statement issued by the central bank said that it had been decided to include ACU Japanese Yen as the third ACU currency along with USD & EURO with effect from January 01, 2020.

The ACU Yen would be equivalent in value to one Yen. Accordingly, transactions under ACU Mechanism, in addition to ACU Dollar (ACUD) & ACU Euro (ACUE), may also be denominated and settled in ACU Yen (ACUY) from January 01, 2020.

In this regard, ADs may establish ACUY accounts with their correspondents in ACU member countries and open their correspondents’ ACUY accounts with them.

The transactions in ACUY would be reported by ADs to SBP and settled by SBP separately likewise in other two ACU currencies.

Accordingly, three separate accounts will be maintained for the settlement of each ACU currency (ACU Dollar, ACU Euro and ACU Yen).

Further, with a view to encourage ADs to maintain reasonable / sufficient balances in their accounts to ensure timely payments, the authorized dealers are permitted to pay / receive interest, at their discretion, on these (ACUD, ACUE & ACUY) accounts as per mutually agreed terms and conditions.

The balances of ACUD, ACUE & ACUY accounts together with other FCY / Nostro accounts would however be subject to the overall exposure limits of ADs.

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