The State Bank of Pakistan (SBP) has eased the import sanctions on Completely Knocked Down (CKD) kits for local car assemblers.
In an official notification, SBP stated that the central bank has decided to undo the import restrictions from January 2, 2023. The decision is to allow for the acceptance of import transaction requests already filed with the SBP.
According to the notifications issued in May and July 2022, banks were obliged to seek authorization from SBP’s Foreign Exchange Operations Department for the clearance of imports.
The auto industry was one of the most adversely affected, as the SBP refused to approve the Letters of Credit (LCs) for the clearance of CKD kits which are the key drivers of the local automobile assembly.
Automakers have been experiencing production shutdowns since mid-2022, which took a toll on their monthly sales. The removal of import sanctions will enable car companies to reinvigorate their production and sales, provided they don’t increase the prices further.
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