In a bid to better monitor and forecast imports, the State Bank of Pakistan has directed banks to share a five-day schedule of upcoming import payments.
The central bank also ordered commercial banks to seek authorization for import payments valued at over $500,000 per transaction. With this directive, the central bank lowered the prior payment cut-off of $1 million per transaction.
A number of officials, who took part in a meeting between the State Bank of Pakistan (SBP), and several commercial bank representatives confirmed the news to Business Recorder.
The new regulations are an attempt to better forecast and monitor the country’s imports as with an imports surge, the current account deficit expands, and the Pakistani rupee (PKR) depreciates.
One bank’s treasury department official, on condition of anonymity, told Business Recorder that the SBP wants the rupee to stay within the range of Rs. 165 to Rs. 170 against the US dollar.
The PKR to its lowest level ever against the US dollar on 15 September, closing at Rs. 169.12 in the inter-bank market.
Similarly, a foreign exchange dealer told Business Recorder that the central bank is introducing import restrictions to tamp down demand.
He said, “Importers were opening letters of credit on 0% markup for luxury items, which has now been stopped by the SBP.”
Pakistan’s trade deficit grew by 120 percent year-over-year (YoY) in the first two months of FY 2022, as imports surged by 73 percent to $12.1 billion.
Meanwhile, the country’s exports grew by 28 percent YoY to $4.6 billion in July and August and slipped by 4.5 percent month-over-month.
