The State Bank of Pakistan (SBP) on Friday lifted all restrictions imposed on imports in order to fulfill the long-standing demand of the International Monitoring Fund (IMF),
The State Bank has issued a circular to remove restrictions on imports.
The SBP has allowed banks to provide foreign exchange to release more than 6 thousand containers stuck at ports.
Foreign exchange will now be provided for all imports without discrimination.
Authorized foreign exchange dealers have also been directed to provide foreign exchange for all imports.
According to the State Bank, the decision was taken on the suggestions of the stakeholders.
It means the government is doing whatever it could to please the IMF to get the stalled deal moving before its expiry on June 30 and ensure the release of over $1 billion in the next tranche despite the fact that Pakistan cannot afford free and large-scale imports amid the current financial crunch.
Through a circular issued Friday, the State Bank of Pakistan directed the commercial banks to release foreign reserves [US dollars] to clear over 6,000 containers currently stuck at the country’s ports.
“Given the representations received from various stakeholders, it has been decided to withdraw the above instructions (issued on Dec 27, 2022) with immediate effect,” the circular read.
The banks were previously advised to prioritise certain types of imports under different categories in the wake of poor foreign exchange reserves and a large trade deficit. Food (wheat, edible oil and other items), pharmaceutical, energy (oil, gas and coal), raw materials and spare parts, and agri inputs (seed, fertilisers and pesticides) were the prioritised imports in a bid to discourage luxury and unnecessary imports.
In the given scenario, experts and official sources are expressing the fear that the importers would continue to arrange dollars from the black market since the banks were out of foreign currencies.
Moreover, it may also again widen the gap between the official and open market dollar exchange rate which had been reduced to around Rs3 against the earlier figures of up to Rs20.
