Emerging Markets Rates and Currencies Handbook

benchmark provided it is approved by Financial markets association of Pakistan (FMAP). Karachi Interbank Offer Rate (Quoted on Reuters page KIBR) can be used initially. The OTC market is very opaque. It is difficult to specify volumes. Max tenor 5 years, CB approval is needed for transactions exceeding 5 years. Hedges cannot exceed the total principal/duration of the underlying exposure. FX Spot FX Forwards NDFs FX Options Interest Rate Swap Interest Rate Options XCCY swaps Market Overview Onshore Market   ✗ ✗  ✗  Offshore Market ✗ ✗ ✗ ✗ ✗ ✗  Onshore Volume (MM USD Daily) 300 – 400 5 N/A N/A Up to 1 N/A 2 – 10 Offshore Volume (MM USD Daily) N/A 1-2 N/A N/A N/A N/A 1-3 Onshore Max Tenor (Or Typical T+2 1 year N/A N/A 10 years N/A 10 years Tenor For Spot) Offshore Max Tenor (Or Typical N/A 0.5 year N/A N/A N/A N/A 3 Tenor For Spot) Onshore Typical Deal Size (MM Up to 3 0.5-1 N/A N/A 5-10 N/A 5 - 10 USD) Offshore Typical Deal Size (MM N/A 0.5-1 N/A N/A N/A N/A 1 USD) Onshore CitiFX Pulse   ✗ ✗ ✗ ✗ ✗ Capabilities Offshore CitiFX Pulse Capabilities   ✗ ✗ ✗ ✗ ✗ A swap curve does not exist in Pakistan, because IRSs are not actively traded, over the counter, very opaque market. Volumes not readily available. Source: Citi indicative information Market opening hours and liquidity during the day Market closes at 1.00 pm on Fridays. Market closes at 3.00 pm Monday — Thursday. Market hours reflect the revised hours stipulated by the Central Bank under the Covid19 restrictions, which have not been reverted to pre-Covid times so far. Fixing There is presently no fixing for client flows. The only FX benchmark published is by the CB for revaluation purposes of banks’ FX position which is done between 1:30 pm to 2 pm on the Reuters page SBPK02. Regulation Offshore Restrictions: Eligible borrowers in the private sector can raise foreign currency loans in Pakistan from foreign lenders in convertible foreign currencies in the form of commercial credit, supplier’s credit, buyer’s credit, working capital loans, intercompany loans, issuance of foreign currency bonds, structured loan facilities and FCY financing under Islamic arrangement subject to the instructions specified below for each category. The funds can only be brought through normal banking channels which necessarily involve a local bank (authorized dealer) at the time of conversion. Deposit sweeping across geographies not allowed. Non-Resident Restrictions: Non-residents (e.g. non-resident corporate) are permitted to transact FX with an onshore entity (e.g. onshore bank) depending upon the nature of transaction and if required, subject to prior Central Bank approvals. Onshore Restrictions: Importers who are importing non-essential items can only do so on a self-funded basis i.e. either by getting foreign sponsor to inject equity or by raising FCY loan.