96-899. Foreign Exchange Operations

[Federal Register Volume 61, Number 19 (Monday, January 29, 1996)]
[Proposed Rules]
[Pages 2750-2751]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-899]



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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 281

RIN 1510-AA48


Foreign Exchange Operations

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Notice of proposed rulemaking.

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SUMMARY: This action proposes regulations to amend the administration 
of the purchase, custody, deposit, transfer, sale and reporting of 
foreign exchange (including credits and currencies) by executive 
departments and agencies. The specific section being amended addresses 
the limitation on the purchase of foreign exchange. Currently, foreign 
exchange acquired by agencies shall be placed with accountable 
officers. Unless otherwise authorized by the Secretary of the Treasury, 
no accountable officer shall purchase foreign exchange which, together 
with the balance on hand at the time of purchase, would exceed 
estimated requirements for a 30 day period. This proposed revision 
would restrict accountable officers to estimated requirements for a 5-7 
business day period unless they have obtained a specific waiver of this 
requirement from the Secretary of the Treasury.

DATES: Comments on this proposed rule must be received on or before 
February 28, 1996.

ADDRESSES: All written comments on this proposed rule should be 
addressed to Michael C. Salapka, Manager, International Funds Branch, 
Financial Management Service, Prince George Metro Center II Building, 
Room 5A19, 3700 East-West Highway, Hyattsville, MD 20782, or by FAX to 
the attention of Bruce Riedl at [phone].

FOR FURTHER INFORMATION CONTACT: Michael C. Salapka, [phone], 
(Manager, International Funds Branch); or Bruce Riedl, [phone], 
(Senior Advisor).

SUPPLEMENTAL INFORMATION:

Background

    To protect the Government from risk, 31 CFR Sec. 281.7(c), 
currently limits accountable officers to purchasing foreign exchange 
only in an amount which, together with the balance on hand, does not 
exceed the estimated requirements for a 30 day period. However, risk 
reduction and improvements in cash management dictate that a shorter 
time period be established. Specifically, in order to (1) minimize 
local currency operating balances held in designated depositaries; (2) 
minimize losses due to rate devaluations; and, (3) avoid premature 
drawdowns on Treasury's General Account, all accountable officers shall 
ensure that the amount of foreign exchange purchased with dollars, 
together with the balance on hand, is commensurate with estimated 
requirements for a 5-7 business day period. This will result in 
interest savings to the Government. Further, balances in the local 
currency operating account held at designated depositaries will be kept 
as close to zero as possible without incurring overdrafts to the 
account.
    In certain situations, the administrative costs, local banking 
regulations, or possible volume discounts appear to require maintaining 
balances in excess of the 5-7 day amount. If circumstances require 
exceeding this limit, the accountable officer must obtain a specific 
waiver of this requirement from Treasury.

Rulemaking Analysis

    This regulation is not a significant regulatory action as defined 
in Executive Order 12866. Accordingly, a Regulatory Assessment is not 
required. It is hereby certified pursuant to the Regulatory Flexibility 
Act that this revision will not have a significant economic impact on a 
substantial number of small entities. Accordingly, a Regulatory 
Flexibility Act analysis is not required. This change primarily affects 
executive departments and agencies.

List of Subjects in 31 CFR Part 281

    Foreign exchange, banks, banking.

    Accordingly, part 281 of title 31 is proposed to be amended as 
follows: 

[[Page 2751]]


PART 281--FOREIGN EXCHANGE OPERATIONS

    1. The authority citation for part 281 is revised to read as 
follows:

    Authority: 22 U.S.C. 2363; 31 U.S.C. 3513; E.O. 10488, 18 FR 
5699, 3 CFR 1949-1953, Comp., p. 972; E.O. 10900, 26 FR 143, 3 CFR 
1959-1963, Comp., p. 429.

    2. Section 281.7(c) is revised to read as follows:


Sec. 281.7  Limitations.

* * * * *
    (c) Unless otherwise authorized by the Secretary, no accountable 
officer shall purchase foreign exchange which, together with the 
balance on hand at the time of purchase, would exceed estimated 
requirements for a 5-7 business day period.
* * * * *
    Dated: December 4, 1995.
Russell D. Morris,
Commissioner.
[FR Doc. 96-899 Filed 1-26-96; 8:45 am]
BILLING CODE 4810-35-P