KARACHI: State Bank of Pakistan (SBP) has allowed 100 percent advance payment for import of various goods against letter credit.
The SBP in a statement on Tuesday said that with a view to facilitate importers, SBP has allowed banks to make advance payment up to USD 10,000/-, or equivalent thereof, per invoice on behalf of commercial importers for import of raw material, spare parts and machinery.
Besides, SBP has also allowed banks to make payments on behalf of commercial importers for imports of raw materials and spare parts on Open Account.
In addition, SBP has also enhanced the existing limit of 50 percent advance payment, allowed to manufacturing concerns, for import of plant, machinery, spare parts and raw materials etc. against letter of credit, to 100 percent.
In December 2019, SBP allowed advance payment of up to 50 percent of the value of imports against letter of credit to manufacturing concerns for import of plant, machinery, spare parts and raw material etc.
After the implementation of a market based exchange rate system, the balance of payments has witnessed significant improvement. In the first six months of the current fiscal year, the current account deficit has contracted by 75 percent to US$ 2.15 billion.
This improvement is helping to further relax some of the restrictions on imports by SBP.
The latest measures, taken today, are in continuation of facilitating export-oriented industries and manufacturing concerns in the backdrop of ease of doing business and promoting exports’ growth.
These measures will further contribute in improving economic outlook of the country.