SBP’s new rules for exporters

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The State Bank of Pakistan has relaxed the import and export regimes in an attempt to facilitate exporters and turn Pakistan into an export-led economy in the long run from a heavily import-oriented economy at present. The central bank lifted the ban on advance payment of up to $10,000 per invoice for the import of goods and services. The financing limit had been enhanced for exporters under the subsidized loan schemes including the Export Finance Scheme and Long Term Finance Facility. Export finance scheme ensures short-term credit availability with concessionary rates and long- term financing facility to exporters for encouraging export-led growth. The SBP amended a rule to facilitate the manufacturing sector. Previously, import advance payment of up to $10,000 per invoice was allowed for importers cum exporters for import of raw materials and spare parts for their own use only. The State Bank will increase the financing limit by Rs100 billion for the full year. The government and commercial banks may also increase their financing limits under the subsidized loan schemes in consultation with the central bank. The improvement in the country’s foreign currency reserves has allowed the central bank to facilitate the importers. The decision will largely facilitate small and medium-sized importers. The improvement came after the country implemented institutional reforms under the International Monetary Fund‘s loan programme worth $6 billion, which started in July 2019. The reforms included a massive change in the rupee-dollar exchange rate made in May 2019.

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