SBP extends deadline for dollar imports for one year

By Our Correspondent
September 24, 2024
An undated image of a State Bank of Pakistan building in this undated image. — SBP Website/File
An undated image of a State Bank of Pakistan building in this undated image. — SBP Website/File

KARACHI: The State Bank of Pakistan has extended the date for the import of cash US dollars against the export of foreign currencies till June 2025, in an effort to maintain a better supply of dollars in the open market, a circular said on Monday.

Earlier in March, the SBP permitted exchange companies to import US dollars in cash up to 50 percent of the value of their export consignments till June 30, 2024.“In order to ensure an adequate supply of cash USD in the open market, the validity of the above instructions is hereby extended till June 30, 2025, the SBP said in a circular.

General Secretary of the Exchange Companies Association of Pakistan’s Zafar Paracha, said that the SBP made the correct decision at the right moment to maintain the rupee’s stability in the open market.

“This move will help increase the dollar’s availability in the market as there was a shortage of dollar liquidity in the currency market,” Paracha said.Approximately $300 million was supplied to the interbank market by exchange firms last month, he said.

“These businesses have provided approximately $150 million to the banks so far this month,” he added.According to Paracha, it is anticipated that the quantity of open market currency dealers’ dollar supply to the banks would rise as a result of the deadline extension for the import of cash dollars.

The SBP previously provided procedure in a comprehensive circular published on July 2023, suggesting that exchange companies may, through reputable cargo/security companies, import cash US dollars against the value of their export consignments of authorized foreign currencies within five working days, if necessary. The agreement would be in effect from now until December 31, 2023, with the stipulation that the total amount of US dollars that an exchange company imports during this time cannot surpass 50 per cent of the value of its export shipments.Such an arrangement would be part of the exchange firms’ agreement with the foreign entity, it said.