KARACHI, July 11: While the economy is under stress owing to rising demand for the dollar, exporters, pampered with incentives of subsidised credits, have retained with them a substantial amount of export proceeds for better returns.

Noticing such violations by banks and exporters, the State Bank of Pakistan has asked the exporters to immediately submit their ‘overdue’ export proceeds.

The exporters, while retaining with them the export proceeds, had even ignored its negative impact on economy.

The SBP also held banks responsible for not bringing in overdue export proceeds in the country and advised them to launch a campaign for realisation of overdue export proceeds.

An SBP circular issued on Friday observed that “despite State Bank’s clear instructions, a substantial amount of export proceeds is overdue which has been viewed seriously”.

The SBP did not mention the total amount of stuck-up overdue export proceeds, but bankers said it could be in several hundred million dollars.

Currency dealers in the inter-bank market said the fresh step to boost inflow of dollars could further increase supply of dollars in the market and depreciate dollar against rupee.

Exporters are bound to surrender export proceeds in a specified time after shipping date or opening of Letters of Credit.

The SBP further said that in terms of related instructions and undertaking on ‘E’-Form, the authorised dealers (banks) are also bound to ensure repatriation of proceeds on due date.

“They are advised to immediately launch a campaign for realisation of overdue export proceeds,” said the SBP.

Authorised dealers were further advised to submit within a week of issuance of this letter a progress report.

Bankers said that initiation of such a campaign would certainly help increase supply of dollars in the local market and ease pressure on the greenback.

Currency dealers, who admire SBP for its current tough measures to tackle the depressing position of the rupee, said that the fresh step would further strengthen local currency.

On Friday, the rupee again recovered its lost value against the US dollar by 1.75 per cent to close at Rs70 in the inter-bank market. Since the SBP has reduced trading time and no second session of trading is being held, the dollar price is settled only for the day when it is traded.

Earlier, second session was used to be held for next day’s opening, and it was used to get a change in the rupee-dollar parity.

The rupee gained about 5.3 per cent against the greenback in the last three sessions which showed that corrective measures should have been taken much earlier, as speculators earned billions of rupees with escalated dollar prices. A currency dealer said exporters were holding dollars with the hope that they would find better returns but still exporters were in profit.

He said that the June rate of dollar was less than today’s and exporters have with them ‘old dollars’.

“It is only the loss of opportunity and not loss of cash for exporters,” said the currency dealer.

The SBP issued foreign exchange reserves position of the country.

During 2007-08, reserves of the State Bank fell by 37 per cent to $8.323 billion while the reserves of the commercial banks improved by 16 per cent to $2.798 billion.

Improvement in commercial banks’ reserves was mainly because of inflow of $666 million against 15 per cent sale of MCB Bank to the Maybank of Malaysia.