State Bank of Pakistan (SBP) has imposed a 100 percent cash margin requirement on the import of certain consumer items including mobile phones.
The new regulation affects the imports of items such as motor vehicles (both CKDs and CBUs), mobile phones, cigarettes, jewelry, cosmetics, personal care, electrical & home appliances, arms & ammunitions, etc.
According to the central bank: “The State Bank expects that this regulatory measure would help accommodate incremental import of growth-inducing capital goods.”
This move by SBP doesn’t make the exporters happy as with the decision to impose a 100 percent margin deposit requirement the prices of such items will likely increase.
The Central Bank believes that this regulatory measure would, interalia, discourage the import of these items and would have a nominal impact on the general public.
The import of mobile phones from July-October 2016 was worth $198 million In Pakistan where most of the mobile phones are imported from other countries, this move can have more than nominal effect as it can increase their prices and also of the other items that are used in our daily lives.
The new regulation will also affect the small businesses as with 100 percent cash margin, the imports of various consumer items may not be a lucrative market for them anymore.