The Pakistan Industrial and Traders Associations Front (PIAF) has urged the State Bank of Pakistan to lift restrictions imposed on importers, after the approval of IMF loan tranche, to keep the domestic industry running smoothly.

The PIAF feared the industry’s closure in the wake of restrictions imposed on industrial raw materials import under customs tariff chapter 84 and 86, saying these restraints had not been lifted despite the approval of loan tranche from the IMF.

PIAF Chairman Faheem Ur Rehman Saigol, in a joint statement received by WealthPK, along with Senior Vice Chairman Haroon Shafique Chaudhary and Vice Chairman Raja Adeel Ashfaq, said the business community believed, “the import restrictions will be relaxed as soon as the country receives the first installment of the IMF loan, but the situation has not changed so far.”

If the import of industrial raw material, parts and machinery was halted, the industry would stop running gradually, leading to inordinate delay in export orders, the statement said. Some of the sectors have already slashed their productions because they were facing difficulties due to currency crisis, it added.

The statement noted that the State Bank Foreign Exchange Department (FEOD) had made customs tariff chapter 84, 85 import payments conditional on its approval. The commercial banks, following the State Bank’s condition, were not providing dollars to the importers.

After the circular issued by the FEOD on July 5, the import of every kind of plant and machinery, capital goods and raw material had stopped, it said and added, consequently hundreds of consignments were stuck at different ports and almost the same number of consignments was on their way.

Moreover, the PIAF officials said, hundreds of consignments remained stuck at the port after the government enforced a ban on the import of luxury items. The importers had to pay heavy demurrage to the shipping companies, as the government did not waive off demurrage and detention charges, they claimed.

Meanwhile, PIAF Chairman Faheem Saigol said the industry need a supply chain to run the whole economy, as big industries require raw material all the time. He claimed the State Bank’s decision had negatively affected the pharmaceutical, auto, plastic, mobile phone, engineering and textile industries.

The most concerned were those industries whose consignments had reached the port and were asked by the suppliers to pay the bill, he said. Though importers had the money, but they were unable to send it to them, he added.

Those who import goods under Cash Against Document (CAD) claim their clients were getting angry with them as they are unable to make payments in time, he said.

Faheem appealed to the government to immediately direct the finance ministry and the central bank to play its role of keeping check on the banking sector as every bank was charging its exchange rate ranging from Rs 225 to Rs 230 against one dollar.

He also criticized the government over the volatile exchange rate, despite the arrival of IMF loan tranche, fearing it would increase inflation and could halt economic growth.

The finance ministry should ascertain factors weakening the value of the rupee and check possibilities of undue speculations and malpractices in operation of foreign exchange markets to help stabilize the rupee and restore confidence of the business community, he added.

Credit : Independent News Pakistan-WealthPk