Foreign Exchange (Temporary Restrictions) Act, 1998

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THE FOREIGN EXCHANGE (TEMPORARY RESTRICTIONS) 
ACT, 1998 
 
 
 
CONTENTS 
 
 
1. Short title, extent and commencement 
2. Restriction on withdrawal of foreign exchange etc. 
3. Certain protection to remain unaffected 
4. Power to make rules 
5. Repeal and saving 
 
 
 
 
 
 
 
 
 

 
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THE FOREIGN EXCHANGE (TEMPORARY RESTRICTIONS) ACT, 1998  
 
ACT No. IV OF 1998 
 
An Act to provide for dealings in foreign exchange 
 
WHEREAS it is necessary to impose certain temporary restrictions for and in relation to 
foreign exchange; 
 
It is hereby enacted as follows:— 
 
1. Short title, extent and commencement.—(1) This Act may be called the Foreign 
Exchange (Temporary Restrictions) Act, 1998. 
 
(2) It extends to the whole of Pakistan. 
(3) It shall be deemed to have come into force on the twenty-eighth day of May, 1998. 
2. Restriction on withdrawal of foreign exchange etc. —Notwithstanding anything 
contained in the Protection of Economic  Reforms Act, 1992 (XII of 1992), or in any other law for the time 
being in force, or in any agreement or contract, it is hereby  provided that the right to hold, sell, withdraw, 
transfer, pay or take out foreign exchange held by any person in Pakistan as on the twenty-eighth day of May, 
1998, (the “specified  date”) without the prior permission of the State  Bank of  Pakistan shall remain 
suspended: 
 
Provided that there shall be no legal restriction on any person converting his foreign exchange 
held as above into rupees at the officially notified rate of exchange. 
 
Explanation.—For the purpose of this section “foreign exchange”  means foreign exchange 
held in a foreign currency account or in such other form as the Federal Government may specify. 
 
3. Certain protection to remain unaffected. —(1) Subject to the provisions of this  Act all 
the protections and immunities conferred in terms of the Protection of Economic Reforms Act, 1992 
(XII of 1992), shall remain unaffected. 
 
(2) The Federal Government may— 
 
(a) make provision for the grant of further concessions for, or in relation to,  
amounts converted from the  foreign exchange referred to in section 2 held as 
on the specified date into rupees, or assets acquired therefrom; and 
 
(b) issue financial instruments including bonds of varying maturities  against the 
aforesaid foreign exchange which shall carry with them  not less than the same 
entitlements, protections and immunities, as the foreign exchange held on the 
aforesaid date save and except for  the right to immediate repayment  in foreign  
exchange. 
 
4. Power to make rules.—(1) The Federal Government by rules empower the State Bank of 
Pakistan to— 
 
(a) pass general orders suspending the right of persons to repayment  except in 
rupees in relation to the foreign exchange referred to in  section 2 as on  the 
specified date; 
 
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(b) make provision for the payment of profit to persons holding foreign exchange 
referred to in section  2 as on the specified date in  foreign exchange or in 
rupees; and 
 
(c) classify citizen of Pakistan on the basis of their status being resident or non-
resident of Pakistan or other persons  on the basis of residence or nationality 
or otherwise for the purpose aforesaid. 
 
(2) Pending the framing of rules under subsection (1) withdrawals, remittances or  payments 
in foreign exchange shall be made with the prior permission of the State Bank of Pakistan. 
 
5. Repeal and saving.—(1) The Foreign Exchange (Temporary Restrictions) Ordinance, 
1998 (VII of 1998), is hereby repealed. 
 
(2) Any rules, orders or instructions regarding  foreign exchange  made or  issued by the 
Federal Government or the State Bank of Pakistan and in force before the commencement of this Act 
shall, in so far as such rules, orders or instructions are not  inconsistent with the provisions of this 
Act, be deemed to have been made or issued under this Act. 
 
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