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STATE BANK OF PAKISTAN

Mission:
SBP mission is to practical, professional and effective management of foreign
exchange & debt markets to contribute towards achievement of SBP’s mission to
set Exchange & Debt Management Department (E&DMD) as a performance
benchmark for other departments of SBP.

Introduction:
Exchange & Debt Management Department is a newly constituted department of
State Bank of Pakistan. The idea of constitution of this department was to
combine FX and money market activities under one roof, hence Securities
department taking care of money market activities and Dealing room taking care
of FX market activities were merged together on February 17, 2000.

Objectives:
1. Monetary Operations.
2. Raising short term and long-term domestic debts for the Government.
3. Management of Government Debts
4. Providing funds to the financial institutions as lender of last resort
5. Monitoring of money and FX market activities.
6. Intervention in the FX market.
7. Reserve Management.

Organ gram:
1. Local Foreign Exchange (FX) Division.
2. Local Money Market (MM) Division.
3. In house Reserve Management Division.
4. Outsourcing Reserve Management Division.
5. Government Securities Division.
6. Debt Management Division.
7. General Division

Functions of E&DMD
The Primary functions of Exchange & Debt Management Department fall into the
following categories.

1 Exchange Rate Policy Management.
• Stable Exchange rates and Forward Premiums at appropriate/sustainable
levels
• Sale & Purchase of third currencies at optimum prices
• Smooth & sufficiently liquid Foreign Exchange Market
• Optimal accumulation of Foreign Exchange Reserves and Forward portfolio.

2. Monetary Policy Implementation.
• Maintenance of stable interest rates in inter-bank money market through
proactive management of Money Market liquidity.
• Raising short-term government debt and developing yield curve through
auction of Market treasury bills.
• Proactive management of Money Market Liquidity through Open Market
operation.
• Providing liquidity to the market through SBP 3 days repot facility.
3. Reserve Management.
Optimal utilization of Reserve Portfolio and maximum returns on investment of
surplus reserves Hiring of investment consultant & Fund Managers for optimizing
returns

4. Debt Management.
a) Domestic Debt
• Developing the markets for government securities.
• Coordination with monetary and Fiscal Policies.
• Raising short term and long term domestic debt for the government.
• Data base management of permanent and floating debts.

b) External Debt
• Monitoring and ensuring prompt payment of external debt installments
through State Bank of Pakistan and commercial banks.

• Management of FEBC, DBC, FCBC (3 & 5 yrs), Special US Dollar Bonds etc.,
through formulation and interpretation of rules and regulations governing
these securities to ensure smooth functioning of the system.

• To generate reports on external debt, connectivity of Debt Management and
Financial Analysis System (DMFAS) have been established between Eco,
Affairs Division and SBP