CB says direction to double forex sales will not have any impact on migrant workers, exporters

The Central Bank yesterday clarified that the recent increase of the percentage of foreign exchange sales by the banks to the Central Bank from 25 percent to 50 percent is exclusively applicable to the banks and that would not have any impact on the prevailing requirements for the foreign exchange earnings of expatriate workers and export proceeds of exporters.

The Central Bank, in a bid to collect foreign exchange to finance the crucial imports as well as to rebuild foreign reserves, directed the banks this week to sell 50 percent of the remittances and residual export proceeds they collect every week to the Central Bank, as there has been a significant increase seen in the inflows via the formal banking system, since the rupee was floated on March 7. 

The move is unlikely to have any implication on the migrants sending their money via the formal banking channels or the exporters, as the instructions would apply only to the banks, which deal with the Central Bank on foreign exchange. 

The fresh instructions effectively double the amount of foreign currency, which is supposed to be sold and converted into rupees, as the previous cap was set at 25 percent.
The fresh instructions apply from March 21 to July 29, 2022.