SBP reduces cash margin requirements for importers

Decision to apply on credit terms of over 90 days
Aug 05, 2022

The State Bank of Pakistan reduced the cash margin requirement on deferred payment to provide relief to importers, who have faced tough restrictions since the current government decided to curb imports.

The government has been successful in checking the current account deficit with import bill declining by 12.81% to $4.86b in July from $5.57b over the corresponding month of last year.

The government has been easing curbs on imports in recent weeks.

On Friday, the SBP announced a reduction in the cash margin requirements.

“To provide relief to importers, #SBP has significantly reduced cash margin requirements on deferred payments. Cash margin will be 25% for payments from 91 to 180 days & 0% for payments beyond 180 days instead of previous requirement of 100%,” the central bank said.

The reduction does not apply to imports where the credit terms of imports are less than 90 days.

“It may be noted that the above instructions shall be applicable on 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 in accordance with above table,” the SBP said in a statement.

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