August 5, 2022 (MLN): State Bank of Pakistan (SBP) Friday, has significantly reduced cash margin requirements (CMR) on deferred payments to provide relief to importers.
As per the circular issued by SBP, the cash margin will be 25% for payments from 91 to 180 days and 0% on payments beyond 180 days instead of the previous requirement of 100%.
Based on the tiered approach, the cash margin requirements shall be applicable to the PKR equivalent amount of the import transaction.
It may be noted that the above instructions shall be applicable to all new import transactions initiated by the bank after the issuance date of this circular letter.
However, on already initiated import transactions, the instructions may only be applied if the amendments (in terms of payment) are made subsequent to the date of the issuance of instructions, the circular said.
The cash margins deposited by importers on all items subject to CMR would be non-remunerative, it added.
To recall, in April’22, SBP imposed 100% cash margins on 177 items in a bid to curb their imports.
These items were mostly finished goods including luxury items and excluding raw materials.
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