KARACHI: In a bid to reduce pressure on the forex reserves, the State Bank of Pakistan (SBP) on Monday has imposed 100 percent cash margin requirement on import of another 131 non-essential consumer items.
In 2017, the Central Bank had imposed a 100 percent cash margin requirement on the import of some 404 items as with the imposition of 100 percent LC margin, the importers are required to make 100 percent payment at the time of Letter of Credit (LC) opening and this step would possibly compel importers to reduce their imports due to liquidity constraints.
According to the SBP’ statement, in exercise of powers vested in the State Bank of Pakistan under the Foreign Exchange Regulations Act, 1947, State Bank of Pakistan Act, 1956 and other enabling laws, it has been decided that banks, with immediate effect, shall obtain 100 percent cash margin on the import of 131 listed items.
The regulatory measure would discourage the import of items including motor cycles, old used or recondition, parts/accessories, new pneum tyres for motor cars, cng kits for vehicles, remote control, air conditioning machines, sim cards, paper & paper board in sheet, whey powder, suspension shock-absorbers, auto bulbs, mosquito coils, mats and the like, portable computer, rice in husk (paddy or rough), sacks & bag of other plastics, sanitary towels and tampons, laser jet printers, glassware of glass-ceramics, vegetable oils & its fraction, ink jet printers, and cinnamon and cinnamon-tree flower. Also, green tea, instant gas water heaters, diapers for infants and babies, large cardamoms electric telephone cables, footwear sole, condensors, printing ink black, instant coffee in retail packs, and many other items. On the other hand, stakeholders believe that the decision to impose a 100 percent margin deposit requirement by the central bank will put up prices of such items. It is to be noted Pakistan’s trade deficit reached all-time high of $37.6 billion in Fiscal Year 2017-18 (FY18).
Published in Daily Times, July 17th 2018.