SBP facilitates IT exporters to earn more dollars

In a move to encourage exporters of software and IT&IT-enabled services to bring more dollars into the country, the State Bank of Pakistan (SBP) has allowed 35 per cent retention of their earnings outside the country. For meeting this objective, the SBP has amended the Foreign Exchange Regulations and advised the banks to mandatorily allow, till March 31, 2023, retention of 35pc of their export proceeds in special foreign currency accounts. However, such exporters need to be registered either with Pakistan Software Export Board (PSEB) or with Pakistan Software Houses Association (P@SHA). These instructions will be reviewed in light of the incremental export performance by the IT sector and realisation of export proceeds during this period. The exports of telecommunication, computer and information services collectively increased to $2.618 billion in FY22 from $2.108bn in FY21. However, the SBP move to restrict the outflow of dollars has started hurting the sector as the exports were almost static at $1.087bn during July-November FY23 compared to $1.051bn in the same period last year. “Exporters would be allowed to use their retained funds for legitimate business payments or expenses abroad,” said the SBP in a circular issued on Friday.