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Business & Finance

SBP governor hopeful of foreign exchange inflows in coming days

  • During address at FPCCI, Jameel Ahmad expresses commitment to resolving issues of business community
Published January 18, 2023
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Governor State Bank of Pakistan (SBP) Jameel Ahmad on Wednesday expressed optimism that Pakistan’s foreign exchange reserves position will improve as the country is expected to witness inflows of funds in the coming days.

“We are expecting inflows from next week onwards, which would reduce pressure on our foreign exchange reserves,” the SBP governor said in his address at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Karachi.

Ahmad expressed his commitment to addressing the issues of industrialists and said the FX reserves of the country have depleted to a low level. “However, we will see a surge in reserves as projects in the pipeline will soon start to materialise, which will improve our capacity to facilitate businesses,” he said.

As per latest SBP data, foreign exchange reserves held by the central bank fell by a hefty $1.23 billion to a highly critical level of $4.34 billion. This is the lowest level of SBP’s reserves since February 2014.

Total liquid foreign reserves held by the country stood at $10.19 billion, and net foreign reserves held by commercial banks stood at $5.85 billion.

The low level of reserves was the reason behind the SBP placing restrictions on imports earlier this year, much to the dismay of several importers and businesses in Pakistan that cited these curbs as the reason behind shutting down or scaling back operations.

Ahmad said the SBP facilitated shipments under the categories of essential, energy, export-oriented industries, agriculture inputs, deferred payment / self-funded imports and imports for export-oriented projects near completion.

Earlier, the central bank had decided to withdraw restrictions placed on imports with effect from January 2, 2023,

Summing up one of Pakistan’s worst economic crisis

“Our capacity to export will build up only after we complete export-oriented projects, thus we have facilitated the timely completion of these projects,” he said.

“We want to facilitate all the industries, however we can only do so under our given capacity of inflows. We do not produce dollars locally, they come through exports, remittances and inflows from lenders,” said Ahmad.

“We are focusing on improving our capacity, and are also taking administrative intervention to bring our imports on a reasonable level,” he added.

The SBP chief said evaluating the Letter of Credit (LC) is a time-consuming exercise. “We have cleared 33,000 LC cases,” he said.

He also said that the central bank was aware of business community problems, and measures were taken to control the current account deficit.

The governor said that the SBP will carefully evaluate proposals provided by the business community, and soon launch an action plan in this regard.

He assured the business community that the central bank will ensure the approval of 365-day or over LCs from banks. “Similarly, if you have arranged a project loan, and yet the LCs are not being opened, the SBP will ensure it,” he said.

Days ago, in order to encourage IT companies and freelancers to bring their foreign exchange earnings into the country, the SBP had advised banks to mandatorily allow the retention of 35% of their export proceeds in special foreign currency accounts.

“We are hopeful that the problems of the IT sector will be addressed, and as a consequence, our exports from the IT sector will increase,” said Ahmed in his address.

Comments

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Ahmed Khan Jan 18, 2023 02:28pm
Just Shut Up !
thumb_up Recommended (0)
ALI RAZA MEGHANI Jan 18, 2023 04:34pm
Be professional not politician
thumb_up Recommended (0)
Mehmood Jan 18, 2023 05:32pm
Foreign reserves coming in few days. They won't tell you how many days. They are just giving false hopes. They are not even sure of anything.
thumb_up Recommended (0)
Ajmal Jan 18, 2023 10:25pm
Govt should give better rate then open market so that exports proceeds withheld outside of country should pour in,specially I.t. export proceeds
thumb_up Recommended (0)
Ajmal Jan 18, 2023 10:27pm
It proceeds should be incetivised.
thumb_up Recommended (0)

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