SBP governor sees rise in forex reserves amid expected dollars influx next week

Addressing the business community, Jameel Ahmad said the process to open LCs would be restored

KARACHI (Dunya News) - State Bank of Pakistan (SBP) Governor Jameel Ahmad on Wednesday expressed hope that the country s foreign exchange reserves would increase after the influx of US dollars next week, saying the process to open letters of credit (LCs) would be restored soon. 

Addressing the business community at the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in the provincial capital, he said the central bank wanted to facilitate the business communtiy [at every cost]. He said the government had to take some tough measures in the wake of widening currenct account deficit (CAD). 

The governor admitted that the imports witnessed a drop and that the central bank was facilitating the process for the agriculture sector. He said 33,000 LCs had been cleared so far. He said the SBP facilitated shipments under the categories of essential, energy, export-oriented industries, agriculture inputs, deferred payment / self-funded imports and imports for export-oriented projects near completion. 

“Our capacity to export will build up only after we complete export-oriented projects, thus we have facilitated the timely completion of these projects,” he said. 

-- Industrialists raise concerns -- 

Industrialists and businessmen complained to the governor that if the supply chain was not restored, there would be a flood of unemployment in the country and the prices of pulses would go up to Rs1,000 per kg in Ramazan. 

FPCCI President Irfan Sheikh said exporters and importers were looking towards the SBP for resolution of their problems. 

Former FPCCI pesident Nasir Magu said the people sitting in the central bank considered themselves the World Bank and the IMF, fearing riots in March this year. He suggested that the dollar transfer should be allowed in the open account. 

"Iran is doing barter trade with Europe and India and in this way millions of dollars can be saved," he said and warned that if supply chain was restored, there would be a flood of unemployment and the prices of pulses would be Rs1,000 per kg in Ramazan. 

Ex-FPCCI president Anjum Nisar lamented that the Ministry of Finance and the SBP had no policy to solve the crisis. "It seems that the central bank is hand in glove with the commercial banks as industries are shutting and people are being laid off." Mr Nisar said the banks were giving three rates of US dollar. 

Speaking on the occasion, industrialist Zakaria Usman said an open import of dollars should be allowed on an indvidual basis.