KARACHI: State Bank of Pakistan (SBP) Acting Governor Dr Murtaza Syed announced the formation of a committee and the appointment of an SBP liaison officer for close coordination with the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and timely redress of grievances of the business committee.

A statement issued by the central bank on Wednesday said that Dr Syed made the announcement during his visit to the FPCCI at the invitation of their management.

The senior management of the SBP including deputy governors Inayat Hussain and Sima Kamil, visited the FPCCI to discuss current economic challenges and the measures being taken by the government and the central bank.

On the occasion, Dr Syed said the SBP believes the rupee is currently undervalued and that the dollar has overshot in the forex market for a variety of reasons, but that it will return to its true value in 2-3 months.

Dr Syed also assured the participants to look into the technical requirements of prior approvals required by the commercial banks from SBP on the clearance of financial documents of the consignments with the H S Codes starting with 84 & 85 as these restrictions were affecting the import of tractor parts and other agricultural machinery as well.

FPCCI President Irfan Iqbal Sheikh requested the SBP governor to use policy tools available at the central bank’s disposal to check the speculative dollar trading over the past few weeks.

He observed that importers, manufacturers, and industries were at the receiving end due to the speculative nature and unavailability of dollars, the shortage of industrial raw materials, and the resultant disruptions in the production processes.

Mr Irfan said that over the past several weeks the commercial banks have been offering LCs to importers at the rates higher than inter-bank rates and requested the SBP to play its role for course correction.

According to a senior SBP official, the bank has increased short-term export refinance limits from Rs432 billion to Rs857bn in the last four years, a nearly 100 per cent increase.

Similarly, the outstanding stock of SBP’s long term fixed rate financing for exporters (LTFF) has increased by 57pc in the last three years, from Rs209bn to Rs329bn.

Published in Dawn, August 4th, 2022