OWING TO NON OPENING OF LCs INDUSTRIES GET LOCK DOWN : Faraz

The Financial Daily 20/07/23

KARACHI: In a recent visit to the Korangi
Association of Trade and Industry (KATI),
Muhammad Aurangzeb, Chairman of
Pakistan Business Council, President &
CEO of Habib Bank Limited and Pakistan
Banks Association emphasized the crucial
role of a stable long-term economic policy
in the country, says a Press release.
During the event, prominent figures from
the banking and industrial sectors, including
KATI President Faraz-ur-Rehman, Deputy
Patron-in-Chief ZubairChhaya, Senior Vice
President Nighat Awan, Vice President
Muslim Mohamedi, Former President
Gulzar Firoz, Sheikh UmarRehan,
Saleem-uz-Zaman and others were in attendance.
Aurangzeb acknowledged the challenges
faced by the industry due to the non-opening
of Letters of Credit (LCs), which resulted in
a lockdown of various sectors. He highlight-
ed that international banks were initially
hesitant to confirm Pakistan’s LCs, but the
process of confirmation began a few months
ago. As a positive development, documents
for import LCs are now being cleared,
indicating progress in the matter.
Praising the visionary approach of the late
S.M. Munir, Aurangzeb stressed the absence
of an alternative plan for the economy following the International Monetary Fund
(IMF) agreement. Drawing attention to
Bangladesh’s economic model, he com-
mended its 12-year policy continuity and
the significant role of women in driving
economic development. Aurangzeb further
emphasized the need for prioritizing exports
to achieve sustained growth.
Regarding the financial situation,
Aurangzeb stated that the value of the
Pakistani rupee is closely linked to LCs.
While banks have resumed opening LCs,
the government previously had to halt
import payments due to a shortage of
foreign exchange. However, the situation is now showing signs of improvement.
Aurangzeb expressed optimism that
inflation would decrease by the end of the year,
with a possible decrease in the interest rate
anticipated for the following year.
Earlier, KATI President Faraz-ur-Rehman
highlighted the vital role of the banking sector, which works hand in hand with importers and exporters. He raised concerns
about the prolonged non-clearance of LCs
and associated documentation by competent
banks, causing numerous problems for the
business community over the past few
months.
Deputy Patron-in-Chief Zubair Chhaya
shed light on the challenging conditions
faced by industries in the current economic
senario. He also noted an increase in the
business of banks, but underscored the
detrimental effects of issues related to LCs,
imports, and markups on manufacturers.
Chhaya expressed disappointment in the
contrary outcome following the IMF
agreement, as the anticipated decrease in the dollar value and inflation did not materialize.
He particularly emphasized the significant
impact on the Small and Medium-Sized
Enterprises (SME) sector, emphasizing the
urgent need for remedial action.

Posted in: Press Releases