Import of additional 114 items: SBP imposes 100pc cash margin requirement

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Banks get SBP warning for engaging in currency speculation: sources
Banks get SBP warning for engaging in currency speculation: sources
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In order to keep the exchange rate stable and control the rising import bill, the State Bank of Pakistan (SBP) on Thursday announced a 100 percent Cash Margin Requirement (CMR) on the import of additional 114 items, reports BC

Pakistan’ exchange rate has been volatile for the last few weeks and Pak rupee continues to fall against the US dollar. The Pak Rupee is declining primarily due to higher goods imports that increase the demand of the US dollar in the money market. On Thursday, the dollar was traded at Rs170.66 in the inter-bank market and it surged to Rs 172.50 in open currency market.

The continued fall of Pak rupee against dollar has forced the SBP to take some appropriate measures to keep stable the exchange rate. Therefore, SBP on Thursday took another measure to stabiliSe the volatile exchange rate and decided to impose 100 percent CMR on import of 114 items. With this announcement, the total number of items subject to Cash Margin has reached 525.

Previously, 100 percent cash margin requirement was imposed in 2017, on 404 items to discourage the import of largely non-essential and consumer goods. The list was further expanded in 2018. However, in order to enable businesses to absorb the shocks of COVID-19 pandemic, SBP provided relief by removing cash margin requirement on 116 items.

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