KARACHI: State Bank of Pakistan (SBP) Governor Dr Reza Baqir on Tuesdaysaid the foreign exchange reserves of the country have improved and willincrease further as the market sentiments and economic indicators are nowvery much positive.
“The increase in forex is not because of loans but after improved marketsentiments. The central bank is in a position to build the reserves,” hestated during a press conference at SBP’s head office.
The governor said that he had come before media to speak on the recenteconomic development in the country; especially to announce two initiativesthe central bank had taken for ease of doing business and for thefacilitation of exporters.
The banks had also issued circulars in this regard.
He said in July 2018, SBP had restricted the advanced payments againstimports due to pressure on reserves and current account deficit.
“With the passage of time, things improved and SBP felt comfortable toallow all advance payment up to $10,000 for each invoice,” he said. “SBPhad started with small amounts so that small exporters could take morebenefit from this step.”
The second circular was regarding the acquisition of services from abroadand such services could be acquired from abroad without prior permissionfrom SBP’s Foreign Exchange Operations Department if the value of thespecific service does not exceed dollars 10,000.
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“After having positive results of such initiatives, the central bank couldgo for more initiatives,” the SBP governor said. “With the improvement inthe external regime, SBP has moved for ease of doing business.”
For economic prosperity, he said, the country would have to rely on exportsand short and long-term measures were needed in this regard. “SBP is goingto introduce a short-term export finance scheme and long-term financescheme (LTFS). Under LTFS, the loan would be offered at 5pc to textileexports and at 6pc to other sectors.”
He said the two schemes were very important to help boost exports, addingthat financial limits for exports were also being increased. “Over time,new sectors would also be included in the list.”
He said the exporters, however, would have to enhance their capacity.
The SBP governor said the reforms introduced by the present government havestarted giving better results. “The economic indicators, including thePakistan Stock Exchange, are performing much better. Now, we need to shiftour orientation from inwards to outwards,” he remarked.
