KARACHI: The State Bank of Pakistan (SBP) has changed its policy to force exporters to return revenues to Pakistan within 120 days rather than 180 days, a decision that exporters say is impractical.
The SBP said on Wednesday that it has changed foreign exchange laws, requiring exporters to return revenues back to the nation within 120 days after shipping. Previously, exporters had to send their revenues in within 180 days.
“The new measure is expected to positively impact foreign exchange inflows in the market,” the SBP said, adding that “a flexible exchange rate has appropriately played its role as a shock-absorber and it is important that its role be complemented by strong exports proceed realisation.” The move brought Pakistan’s regulations closer to international best practices, it said.
However, exporters say the new limit is not workable. “Exporters make deals with importers on various modes of payments. It can be in cash, advance payments and sometimes in the form of loans or late payments,” said Pakistan Apparel Forum chairman Jawed Bilwani.
He said the decision was announced without taking the exporters on board.
The government and the State Bank have stepped it up to hold the foreign exchange tightly in their hands in the face of a large import bill and current account deficit. Several measures have been taken during the current fiscal year to restrict the outflow of dollars from the country.
In its statement, the SBP reminded that it had also introduced a number of policy measures recently in its foreign exchange regulations to facilitate exporters.
These measures include allowing up to 10 per cent of exporters’ annual exports for equity investment abroad to establish overseas subsidiary/branch office, and allowing exporters who are eligible to retain part of their export proceeds to make payments abroad from their export retention account for a number of additional purposes.
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The SBP said it has also facilitated e-commerce by allowing exporters to sell their products directly through their own websites as well as through international digital marketplaces like Amazon, e-Bay, Alibaba, and has allowed exports by way of dispatch of shipping documents directly to the foreign buyer to make exporters competitive in the international market.