The State Bank of Pakistan (SBP) has decided to introduce a 100% margin requirement (CMR) on 114 imported items, bringing the total number of items of cash margin to 525. This is expected to helps prevent imports of these products and thus reduce trade deficit. In this regard SBP issued BPRD Circular Letter No. 30 of 2021
Cash margins significantly increase import costs in form of opportunity costs. The cash margin amount is deposited in advance, for import. Initially 100% cash margin was imposed In 2017 for additional 404 products , which makes it difficult to import non-essential and consumer goods. The list was expanded in 2018. However, SBP reduced CMR for 116 products in 2020 to help reduce adverse impact of COVID19.
Now SBP has decided to change its policy By setting 100% cash margin requirements for 114 imported goods. This complements SBP Other policy measures to reduce the imports and contain the current account deficit at a sustainable level.
The circular can be read here
The list of products where margin has been increased can be read here
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