Dollar crisis: SBP striving to clear 11,000 import payment pending cases

Dollar crisis: SBP striving to clear 11,000 import payment pending cases

KARACHI: Facing acute shortage of US dollar, the State Bank of Pakistan (SBP) is striving to clear 11,000 import payment pending cases, said SBP governor Jameel Ahmad on Wednesday.

Addressing at a meeting with office bearers of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the SBP governor announced some broad measures to alleviate the concerns of the business community: (i) SBP will be striving to clear the backlog of approximately 11,000 cases (ii) food products; industrial raw materials; energy producing imports and agricultural raw materials will be given priority when opening LCs (iii) SBP will share its findings pertaining to the mismanagement of foreign exchange; and, appropriate action will be taken against commercial banks – if required (iv) he will personally interact with the FPCCI committee to reach resolutions fast.

READ MORE: Foreign exchange crisis halts economic activities in Pakistan

Jameel Ahmed also informed that SBP cleared 33,000 cases in the year 2022; and, it took a lot of time, efforts and other resources of SBP. We are expecting an enhanced inflow of dollars in the coming weeks; and, the situation see will improvement as well vis-à-vis dearth of dollars for imports.

Irfan Iqbal Sheikh, President FPCCI, has informed that  Jameel Ahmad, Governor State Bank, has announced a joint committee with FPCCI for the resolution ofthe huge backlog in LCs. The committee will comprise of 4 – 5 nominees of FPCCI’s President and, more or less, same number of SBP officials will be nominated by the governor of the central bank, he added. 

READ MORE: Pak-Iran businessmen stress finalizing free trade agreement

Irfan Iqbal Sheikh announced that the committee will be co-chaired by Mr. Suleman Chawla, SVP FPCCI, from the apex body; and, advised the entire business, industry and trade community to bring their cases to the aforementioned committee. Collective voice should be raised in the broader national interest, he added.

Irfan Iqbal Sheikh explained that delays are causing a plethora of debilitating issues: detention charges, demurrages, shortages of raw materials for industrial production, closure of major industrial units, disruptions in the supplies of agricultural inputs, closure of plants due to unavailability of spare parts of the machinery & equipment, unfulfillment of export orders, loss of revenue due to dwindling production and massive layoffs.

READ MORE: Merchants demand waiver of demurrage, detention charges on polyester yarn

Irfan Iqbal Sheikh stressed that pending cases falling under three different categories can be resolved immediately: (i) all import consignments not involving dollar outflow should be cleared with immediate effect (ii) SBP should come up with a crystal clear plan on what the importers can order from international suppliers to enable the business community to keep the trust of suppliers (iii) Open Account should be completely restored, as currently, it is only good for industries for their raw materials.

READ MORE: FBR issues SRO to impose 5pc regulatory duty on yarn amid protest

Mian Anjum Nisar, former President FPCCI, highlighted that there are three different markets for dollars operating in the country; with rupee to dollar rates of their own; namely, inter-bank, open market and grey market. SBP should take regulatory action against commercial banks for speculative trading and causing unbearable losses to the businessmen, he added.

Expressing his dismay, Mian Nasser Hyatt Maggo, immediate past President FPCCI, said that SBP is behaving like as if they are the World Bank or IMF; and, not listening to the genuine concerns of the business community. He warned that the situation is so precarious that there may be social unrest due to the fast-amassing economic disarray.