Exchange companies have offered the federal government to pay for the opening of letters of credit (LCs) as multiple industries suffer due to the refusal of banks to do so, owing to a shortage of dollars.
In a statement, Exchange Companies Association General Secretary Zafar Paracha highlighted that many industries are facing serious issues as banks have refused to open LCs.
Paracha said that exchange companies are willing to assist the government by providing dollars for the opening of LCs. He claimed that exchange companies can pay up to $50,000 for LCs.
He said that the proposal was also put before Finance Minister Ishaq Dar in a recent meeting and is now awaiting a response from the government.
Paracha said that exchange companies could finance imports worth up to $250 million in the next month. However, he highlighted that they would offer the financing at the open market rate which is much higher than the interbank rate.
The suggestion comes as the government is increasingly finding it hard to sustain the country’s foreign exchange reserves, which reportedly have slumped to below $5 billion.