The State Bank of Pakistan (SBP) has announced that it has decided to remove existing the 100 percent cash margin on 177 imported products including flat rolled products and pipes, effective as of March 31, 2023.
Accordingly, now the importers will not have to deposit the amount of money, which is equal to the total value of the import transaction, with the bank in order to open letters of credit.
Scrap imports were excluded from the list of products, and so the scrap market will not be affected by this decision, SteelOrbis understands.
The SBP had imposed a 100 percent cash margin on imported products in February last year to prevent the surge in imports and the sharp depreciation of the Pakistani rupee, as SteelOrbis previously reported.
Meanwhile, this removal fulfils a condition of the International Monetary Fund (IMF) for the revival of its delayed $6.5 billion program. In February this year, the country’s Ministry of Finance and Revenue increased the domestic sales tax rate from 17 percent to 18 percent to implement a condition set by the IMF.