Pakistan's finance minister, Miftah Ismail, has said he is not in favour of further relaxing restrictions on import letters of credit (L/Cs) imposed with the aim of protecting the country's depleted foreign reserves.

Initially, the State Bank of Pakistan incrementally restricted the flow of imports and limited the number of L/C approvals for imports of all products. The government subsequently decided to lift the blanket import ban, and permit the use of L/Cs by Pakistan's exporters that require foreign goods to continue production.

Unequivocally opposed

Speaking to members of the Lahore Chamber of Commerce and Industry, Miftah said he was supportive of exporters but unequivocally opposed to the opening of L/Cs for importers that simply buy foreign goods to sell to consumers in Pakistan.

"Exporters will get their L/Cs facilitated. But I cannot allow pure importers who sell to domestic audiences to have their L/Cs opened," he told chamber members.

Export concerns

Miftah is also concerned about Pakistan's declining export capacity. "We invested more on consumptive ventures like marriage halls and shopping malls than on industries to create an exportable surplus," he said.

Meanwhile, he says that heavy duty and sales tax rates would be imposed on imported luxury goods, including cars, mobile phones, meat and shoes. "Our aim is not to allow the import of non-essential items," he said.

This article represents the views of the author and not necessarily those of the ICC or Coastline Solutions.