INP-WealthPk

Move to Allow Exports to Afghanistan in Local Currency A Positive Step

February 18, 2022

By Raza Khan ISLAMABAD, Feb 18 (INP-WealthPK): The government’s decision to allow export of 14 items to Afghanistan in Pakistani currency is a welcome move that will help the cash-strapped country achieve some sort of economic stability and provide succour to its starving population. Economic experts believe the decision will help the Afghan business community continue trade with Pakistan, especially when business opportunities have dried up in their own country in the absence of a formal banking system there. Adviser to Prime Minister on Commerce Abdul Razak Dawood announced the decision to this effect. “After queries received from Afghanistan regarding exports in Pakistan rupee, the ministry of commerce has readily allowed export settlement of 14 items in Pakistani rupee,” Dawood tweeted. The items include fish and fish products, poultry meat and products, cement, pharmaceuticals, textiles, fruits, vegetables, salt, sugar, rice and surgical instruments. Pakistan’s exports to Afghanistan have dropped from $229.72 million during the October-December period of last fiscal year to $161.48 million during the same time period of 2021-22, down 30%. Abid Qaiyum Suleri, an economic expert and Executive Director of Sustainable Development Policy Institute (SDPI), told WealthPK that the use of local currency for trade with Afghanistan is a good decision in the current situation. “It will help in resuming business and trade activities between the two neighbours. It will also increase and expedite the trade of food items, especially perishable commodities such as fresh fruits and vegetables,” Suleri added. “Trade in local currency will certainly help in smooth running of trade activities, but it will not help much in improving Pakistan’s foreign exchange reserves,” he underscored. Meanwhile, the spokesperson for the ministry of commerce told WealthPK that traders of both sides have long been calling for allowing the shipment of goods in local currency. She pointed out that the decision will hugely benefit the Afghan traders as they are unable to continue business activities because the banking system in their country has ceased to function. “As there won’t be any procedural delays now, perishable items like fruits and vegetables, which have also been added to the list, can arrive at their destinations without being wasted,” the spokesperson added. She said the ministry is also looking for other viable options to enhance trade with Afghanistan. Earlier, Pakistan had also granted a temporary waiver of Electronic Import Form (EIF) to Afghanistan in order to facilitate trade. The waiver was granted for 45 days initially to assist Afghanistan in addressing its economic crisis. As EIFs were not being issued by the corresponding banks to execute import transactions, this led to long queues of cargo vehicles at the Torkham and Chaman border crossings. However, now with the introduction of new measures, imports from Afghanistan will be possible without the mandatory requirement of EIFs as required by the State Bank of Pakistan.