SBP eases cash margin condition for imports

State Bank of Pakistan aims to support manufacturing, industrial sectors to further enhance their capacity

Our Correspondent September 25, 2020
A Reuters file image of SBP logo


The State Bank of Pakistan (SBP) has eased the 100% cash margin requirement for the import of certain raw material to support manufacturing and industrial sectors and to further enhance their capacity to contribute to the recovery of economy during the post-Covid-19 era.

In a statement issued on Thursday, the central bank said the cash margin condition was initially imposed in 2017 on 404 HS Codes and later in 2018 on a further 131 items to contain the import of many consumer goods and to allow room for the import of more growth-inducing items.

“Considering the challenges posed by Covid-19 to the manufacturing sector and other economic segments, and the representations made by various businesses and associations, the SBP re-evaluated the cash margin requirement and decided to remove this requirement on 106 items/HS Codes,” the statement said.

The removal of the cash margin requirement from these items will support businesses’ cash flow and liquidity, by freeing up funds previously held with banks under the cash margin against imports and will route these funds towards avenues of growth and development that will benefit the economy.

Published in The Express Tribune, September 25th, 2020.

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