Finance Minister Ishaq Dar on Monday assured exporters of the government’s support saying they would be given “complete facilitation” in meeting their export requirements.
The statement from the finance minister comes after Karachi port has been holding up thousands of containers filled with crucial food products, raw materials, and medical equipment as the nation struggles with a dire foreign exchange crisis.
Importers wary despite the lifting of restrictions
Banks are refusing to grant new credit letters for importers due to a shortage of critical dollars, which is hurting an economy already under pressure from high inflation and weak growth.
Pakistan’s foreign exchange reserves were earlier this month estimated to have fallen to just $4.56 billion, or about 25 days’ worth of imports, down from $20 billion in August 2021, or about 17 months ago. The government has been forced to restrict its imports to essentials including food, medicine, and electricity due to a lack of foreign currency.
however, Dar initially stated that the country’s foreign exchange reserves today total $10 billion rather than $4 billion since a further $6 billion is kept by commercial banks. He later clarified, however, that the government was not considering gaining access to the bank-held reserves.
Even though the central bank has taken administrative efforts to stop the outflow of dollars, many enterprises have found it impossible to import necessary raw materials, machinery, and equipment from overseas. As a result, numerous industries have reported plant closures and layoffs.
Meanwhile, as Pakistan continues to count its economic casualties amid the non-availability of foreign financing to import raw material, some industries have suspended production until the “availability of raw material” decrying the fact that they are not being facilitated with even $5,000 worth of imports.
The finance minister took to Twitter to announce that the government intended to extend its support to the exporters amid the financial crunch.
“The export industry is one of the highest priorities of our government,” said Dar.
“Five (previously) zero-rated export-oriented sectors and all exporters will be given complete facilitation for the import of raw material, parts and accessories to meet their export requirements,” he added.
Further details on the government’s plans and how it intended to offer the support however were not provided by the minister.
