ISLAMABAD – State Bank of Pakistan launched new scheme for the PakistaniImporters.
The State Bank of Pakistan (SBP) allowed on Thursday banks to make advancepayment up to 50 percent of the value of imports against letter of creditfor manufacturing concerns.
Following SBP’s decision, manufacturing authorities will be able to importplant, machinery, spare parts and raw material by making payment in advanceusing this facility. “Today’s measure is in continuation of SBP’s effortsto reverse the earlier restrictions and facilitate and support ease ofdoing business in light of the improved foreign exchange and economicoutlook,” SBP said in a statement.
Back in July 2018, the country’s central bank withdrew the advance paymentfacility allowed to importers following pressures in the foreign exchangemarket and deteriorating balance of payments situation.
Subsequently, some of the restrictions were relaxed to facilitate importsin critical areas i.e. medicines, education and defense while most of therestrictions remained in place.
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However, after the implementation of a market based exchange rate system inMay 2019, pressures in the foreign exchange market have eased and thebalance of payments has witnessed significant improvement informed the SBP,as reflected in the improving current account balance, rising net foreignexchange reserves, and other indicators.
This improvement in the foreign exchange market after the implementation ofthe exchange rate reforms has allowed to SBP to begin relaxing therestrictions that had been imposed earlier.
