KARACHI: State Bank of Pakistan (SBP) on Friday announced to withdraw cash margin requirements on imports from March 31, 2023.
The SBP through a circular stated that it has been decided to withdraw existing Cash Margin Requirement (CMR) on import of items with effect from March 31, 2023.
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Accordingly, CMR instructions issued vide BPRD Circular No. 02 of 2017, BPRD Circular No. 05 of 2018, BPRD Circular Letter No. 30 of 2021, BPRD Circular Letter No. 09 of 2022, BPRD Circular Letter No. 25 of 2022 and BPRD Circular Letter No. 37 of 2022 would stand withdrawn with effect from March 31, 2023.
The SBP imposed cash margin requirement to curb the imports of luxury and non-essential items due to rising gap of balance of payments.
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Further, the outflow of dollars had also deteriorated the position of foreign exchange reserves as well as pushing the rupee to all-time low level of Rs285.09 on March 02, 2023.
It is believed that the SBP withdrew the conditions due on the demands of the International Monetary Fund (IMF) in order to liberalize the imports.
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Previously, the government in May last year imposed restrictions on import of luxury and non-essential items. However, on the pressure of the IMF the government surrendered the order in August 2022.
Cash margin requirement on imports refers to a monetary deposit or collateral that importers are required to provide in advance in order to secure the payment of customs duties, taxes, and other charges related to the importation of goods.
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This cash margin serves as a form of security against the risk of non-payment, and is typically a percentage of the total value of the imported goods. The cash margin requirement on imports is usually determined by the government or the relevant authorities in accordance with trade and tariff regulations.
