Restrictions still in place for import of raw materials, says FPCCI

KARACHI: Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Suleman Chawla has categorically refuted the claims and assertions made by the State Bank of Pakistan (SBP) that there are no restrictions in place on import of raw materials.

Import payments not being cleared swiftly by SBP are resulting in disruptions in industrial production, unbearable demurrages and container charges, loss-making delays in fulfillment of export orders, inflationary pressures in the domestic markets, and adverse impacts on investor sentiments, he added.

The acting FPCCI chief explained that due to unavailability of foreign exchange, continuous rupee depreciation, speculative trading, and delays by the SBP, manufacturers and commercial importers are facing a crisis and exports have started to decline. The country will suffer due to the dwindling exports, increasing trade deficit, and a yawning current account deficit (CAD), he added.

Suleman Chawla maintained that SBP has failed to exercise its constitutional duties of effectively regulating the commercial banks through various policy tools at its disposal. And commercial banks are making windfall profits through speculative trading of dollars.

The FPCCI has time and again reminded SBP, in no uncertain terms, of their responsibilities to control commercial banks, but the requests have always gone unheeded, he added.

He emphasised that the dollar is trading in the open market at a premium of PKR 8-10 and it is a glaring testimony to the fact that the importers are not being able to source the dollars that they need to fulfill their import contracts and related commercial transactional procedures from the banking channels. It will only aggravate the situation and promote the informal open market.

Suleman Chawla pointed out that there are still difficulties in opening LCs with commercial banks under chapters 84 and 85 of the custom tariff, despite the claimed circular issued by SBP to the commercial banks and that reflects badly on SBP’s ability to implement its regulatory role. However, he said, SBP has all the means and policy tools to implement its decisions and circulars.

Vice President of the FPCCI Engr M A Jabbar pointed out that SBP has resorted to blaming the industrialists and their representatives, who are already under unprecedented strains due to the various other factors in addition to the dearth of dollars in the banking channel.

He added that the FPCCI sees SBP’s conduct as detrimental to industrial growth, as it has shown an utter lack of responsibility, insensitiveness towards people’s suffering... and lack of initiative to fulfill its mandated duties.—PR

Copyright Business Recorder, 2022