The State Bank of Pakistan (SBP) announced on Friday that there will be an extra three months of cash margin limitations on the import of around 177 items.
In an attempt to limit imports, the SBP decided to impose cash margin limitations on a number of imported items early this year. The SBP advised banks to get a 100% cash margin on the import of roughly 177 items in April as a consequence. The instructions specified that any cash margins submitted by importers on certain commodities were non-remunerative to the cash margins until December 31, 2022.
After the first deadline for the cap on cash margins expired on December 31, the SBP made the decision to extend the cash margin requirement for an additional three months. The cutoff date for maintaining the cash margin requirements on the import of certain products has been extended from December 31, 2022, to March 31, 2023.
The laws state that in order to facilitate efficient monitoring, banks must also provide data on cash margins, which apply to all commodities and are routinely obtained from importers. Data for the current month must be received by the Statistics & Data Ware House Department of SBP no later than the 10th of the following month.
Power cranes, passenger lifts, finishing equipment for paper or board, washing machines, dyeing equipment, cellular mobile phones (CKD/SKD), routers, memory cards, agricultural tractors, locomotive parts, sewing machines, carding equipment, combing equipment, tulles, and other net fabrics are among the items that need a cash margin.
According to bankers, the SBP made this choice to ease pressure on the currency rate and manage money market volatility. The SBP chose to prolong the cash buffer for a further three months since the market fundamentals are remained unfavourable, they noted. However, the SBP states that all other directives would stay the same.