SBP extends dollar import facility

KARACHI: The State Bank of Pakistan (SBP) on Monday extended import of the US dollars against export of permissible foreign currencies’ facility to ensure liquidity in the foreign exchange market.

“It has been decided that the exchange companies can continue to import cash US dollars against export of permissible foreign currencies unless advised otherwise,” the SBP said in a circular.

“However, total imports of cash US dollars shall not exceed 35 percent of the total export of permissible foreign currencies during a month.” The central bank also said failure to comply with the above instructions will attract strict regulatory action under related rules and regulations.

Meanwhile, traders were disappointed with the SBP’s decision to reduce import of the dollars from 100 percent to 35 percent. “The restriction on the cash dollar imports is not a positive sign for the open market where the market is volatile and the demand for the foreign exchange is on the rise,” said Zafar Paracha, secretary general at the Exchange Companies Association.

“It could cause shortage of the dollars in the open market,” he added. Paracha said that the exchange companies export approximately $350 million to $400 million worth of various foreign currencies against the import of the US dollars/ month. After the 65 percent cut on the dollar imports, the export of currencies would fall to $122 million/month, he added.