In a major relief for industries and businesses, the State Bank of Pakistan (SBP) notified its decision on Tuesday to withdraw the restrictions placed on imports with effect from 2nd January 2023.
However, the central bank said that dealers must prioritise or facilitate imports under the categories of essential imports, energy imports, imports by export-oriented industry, imports for agriculture inputs, deferred payment/self-funded imports, and imports for export-oriented projects near completion. The SBP also urged dealers to keep in view liquidity conditions when conducting their import orders and payments.
Earlier this month, SBP Governor Jameel Ahmad recognised that administrative measures on imports can not be continued sustainably, and need to be gradually relaxed. He said that from 2023, the SBP may review the restrictions and bring policies that make it easier to do business.
It must also be noted that Pakistan's foreign exchange reserves held by the SBP fell another $584 million to a critical level of $6.12 billion, according to data published last week. This is the lowest level of SBP-held forex reserves since April 2014.
This low level of reserves was the primary reason behind the SBP placing restrictions earlier in 2022. These restrictions were cited by several importers and businesses in Pakistan as forcing them to shut down or scale back their operations in the country.
The SBP had placed restrictions which affected approximately 15% of Pakistan’s total imports. It is now expected that, with improving liquidity and stabilization of the Dollar-Rupee exchange rate, import restrictions will be lifted in phases to restart economic activity in Pakistan.
However, the central bank said that dealers must prioritise or facilitate imports under the categories of essential imports, energy imports, imports by export-oriented industry, imports for agriculture inputs, deferred payment/self-funded imports, and imports for export-oriented projects near completion. The SBP also urged dealers to keep in view liquidity conditions when conducting their import orders and payments.
Earlier this month, SBP Governor Jameel Ahmad recognised that administrative measures on imports can not be continued sustainably, and need to be gradually relaxed. He said that from 2023, the SBP may review the restrictions and bring policies that make it easier to do business.
It must also be noted that Pakistan's foreign exchange reserves held by the SBP fell another $584 million to a critical level of $6.12 billion, according to data published last week. This is the lowest level of SBP-held forex reserves since April 2014.
This low level of reserves was the primary reason behind the SBP placing restrictions earlier in 2022. These restrictions were cited by several importers and businesses in Pakistan as forcing them to shut down or scale back their operations in the country.
The SBP had placed restrictions which affected approximately 15% of Pakistan’s total imports. It is now expected that, with improving liquidity and stabilization of the Dollar-Rupee exchange rate, import restrictions will be lifted in phases to restart economic activity in Pakistan.