State Bank of Pakistan has imposed 100% cash margin requirement on import of certain consumer items.
The requirement of 100% cash margin has been prescribed on items such as motor vehicles (both CKDs and CBUs), mobile phones, cigarettes, jewelry, cosmetics, personal care, electrical and home appliances, arms and ammunition etc.
State Bank expects that this regulatory measure would help accommodate incremental import of growth-inducing capital goods.
Central bank said that this regulatory measure is aimed at discouraging the import of these items and would have nominal impact on the general public.
For layman, to understand what this means: These items are going to get expensive with this new development, however it is too early to estimate the scale as of yet.
This also means that import of above mentioned items through illegal channels will increase. Not to mention, this will discourage those vehicle makers who were planning to enter Pakistani markets in next few months.