The restrictions imposed on imports would be withdrawn with effect from the first week of next month, January 2, says the State Bank of Pakistan (SBP) in a major relief to the industries and businesses which have been complaining about the consequences like shortage of materials.
In this connection, the SBP issued a statement which said the restrictions imposed on May 20 and July 5, which required prior permission before initiating any import transaction, would be withdrawn.
However, the dealers may prioritise or facilitate imports under the categories of essential, energy, export-oriented industry, agriculture inputs, deferred payment/self-funded and export-oriented projects near completion.
The move comes as SBP Governor Jameel Ahmad, earlier this month, admitted that administrative measures on imports must not be continued and needed to be relaxed gradually.
Later, the SBP in consultation with the government identified eight to 10 business sectors which were genuinely affected and needed relief. They were allowed to import 50 percent to 60 percent of their monthly average import payments made from January to June 2022.
In May this year, the Shehbaz-led government had imposed a ban on the import of non-essential and luxury items in a bid to stop devaluation of rupee, strengthen economy, and reduce country s reliance on imports.
Several units shut production
Earlier this week, the Pak Suzuki Motors Company decided to shut down its plants for automobile and bike production from January 2 to January 6, 2023, citing the SBP restrictions and the resultant shortage of parts.
“Restrictions had adversely impacted clearance of import consignment which resultantly affected the inventory levels,” the statement read.
“Therefore, the company is unable to continue its production activities and decided to temporarily shut down the production of both plants.”
Similarly, the Indus Motor Company Limited too blamed the SBP conditions and shut production of Toyota vehicles for 11 days, as it faces shortage of raw material and components.
According to a filing submitted with the Pakistan Stock Exchange, the operations at the production plant would be closed December 20 to December 30.
It added, “The delay in aforesaid approvals for the company and its vendors has created hurdles in import and clearance of consignments for raw materials and components of the company.”
The central bank’s move has resulted in insufficient inventory levels and consequently have created an adverse impact on the supply chain and production activities, the company said. “Therefore, the Company is unable to continue its production activities.”