The State Bank of Pakistan (SBP) declared on Friday that the cash margin restrictions on the import of some 177 products would remain in place for an additional three months.
The SBP made the decision to implement cash margin restrictions on a number of imported goods earlier this year in an effort to reduce imports. As a result, the SBP urged banks to get a 100% cash margin on the import of about 177 products in April. The directions stated that until December 31, 2022, all cash margins deposited by importers on particular items were non-remunerative to the cash margins.
The SBP decided to extend the cash margin requirement for an additional three months after the original deadline for the limitation on cash margins expired on December 31. The deadline for keeping the cash margin requirements on the import of particular items from December 31, 2022, to March 31, 2023, has been extended.
According to the regulations, banks are also expected to transmit information about cash margins, which are relevant to all commodities and are collected from importers on a regular basis, in order to enable effective monitoring. The Statistics & Data Ware House Department of SBP shall receive data for the current month no later than the 10th of the following month.
The list of items that require a cash margin includes power cranes, passenger lifts, machinery that finishes paper or board, washing machines, dyeing machines, cellular mobile phones (CKD/SKD), routers, memory cards, agricultural tractors, parts of locomotives, sewing machines, carding machines, combing machines, tulles, and other net fabrics.
Bankers said the SBP has taken this decision to reduce the pressure on exchange rate and control the volatility in the money market. As the market fundamentals are still not favorable, the SBP has decided to maintain the cash margin for another three months, they added. According to the SBP, all other instructions will, however, remain unchanged.