Dar assures exporters of 'complete facilitation'

Finance Minister Ishaq Dar on Monday assured exporters of the government's support saying they would be given "complete facilitation" in meeting their export requirements.

The finance minister's statement comes after thousands of containers packed with essential food items, raw materials, and medical equipment have been held up at Karachi port as the country grapples with a desperate foreign exchange crisis.

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A shortage of crucial dollars has left banks refusing to issue new letters of credit for importers, hitting an economy already squeezed by soaring inflation and lackluster growth.

Earlier this month, Pakistan’s foreign exchange reserves had been reported to have depleted to a mere 25-day import cover at $4.56 billion at present, compared to $20 billion some 17 months ago in August 2021. The lack of foreign exchange has forced the government to limit its imports to essential goods like foods, medicines and energy.

However, Dar had claimed that the foreign exchange reserves currently stand at $10 billion and not $4 billion as $6 billion are held by commercial banks also belong to the country-- only to clarify later that the government was not considering any access to foreign exchange reserves held by the banks.

While the central bank has taken administrative steps to prevent the outflow of dollars, it is due to such measures that the acquisition of essential raw material, machinery and equipment from abroad has become difficult for many businesses – with many industries reporting plant closures and layoffs.

Meanwhile, as Pakistan continues to count its economic casualties amid the non-availability of foreign financing to import raw material, some industries have suspended production until the “availability of raw material” decrying the fact that they are not being facilitated with even $5,000 worth of imports.

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The finance minister took to Twitter to announce that the government intended to extend its support to the exporters amid the financial crunch.

"The export industry is one of the highest priorities of our government," said Dar.

"Five (previously) zero-rated export-oriented sectors and all exporters will be given complete facilitation for the import of raw material, parts and accessories to meet their export requirements," he added.

Further details on the government's plans and how it intended to offer the support however were not provided by the minister.