Some time ago, foreign traders exporting to Pakistan have been troubled by the fact that buyers cannot get foreign exchange to pay for the goods. Now the good news comes:
In order to meet the requirements of the International Monetary Fund (IMF) to resume loans, the Central Bank of Pakistan issued a notice on June 24 to cancel all import restrictions on food, energy, industry and agriculture in the country. The Pakistani government has allowed banks to provide money transfer service.
Pakistan has experienced a serious shortage of foreign exchange this year, and buyers expressed that they could not get the foreign exchange quota, and even proposed such an outrageous payment period as L/C 180 days.
The Central Bank of Pakistan issued a document on January 23 this year, also suggesting that importers can extend their payment terms to 180 days (or longer).
Currently, Pakistan’s foreign exchange reserves are only enough for one month’s imports. For almost a year, Pakistani authorities have been trying to secure more than $1 billion in funding from the IMF and a $6.5 billion package of loans.
Now, according to the latest document of the central bank, all previous restrictions on imports have been lifted, and the latest order is currently being implemented to provide remittances for all imports. The Pakistani government allowed banks to provide remittances to free more than 6,000 containers.
Pakistan’s Finance Minister Ishaq Dar further reinforced the decision in a parliamentary session, saying: “There will be no restrictions on imports. All conditions are removed.”
According to Pakistani importers, more than 12,000 containers have been held at ports due to lack of dollars, and all foreign suppliers are demanding speedy clearance.
But a researcher at Pakistan’s local securities company said: “I think this is on paper. This may be due to the IMF’s requirement for a market-based exchange rate. In practice, imports of non-essential goods will still be given low priority.”
It is worth noting that after experiencing the great flood of the century, Pakistan’s inflation rate remains high and has reached the worst level in 50 years, with prices rising day by day.
The Pakistani rupee has plummeted 36% against the U.S. dollar in the past year, and once fell to a historical low of 296. The country has been deeply mired in economic crisis.
So remind foreign traders again to pay attention to trade risks in time.