Government Expected to Remove LC Restrictions as FX Reserves Increase

As the nation’s foreign exchange reserves increase, restrictions on the opening of Letters of Credit (LCs) are likely to be lifted by the federal government.

Sources claim that the State Bank of Pakistan (SBP) would gradually begin to issue the LC payments since the government anticipates that when loans from friendly nations begin to materialise, foreign exchange reserves will rise.

The most recent information provided by the central bank indicates that the SBP now holds $3.814 in foreign exchange reserves. The government now has $9.267 billion in total liquid foreign currency reserves, including net reserves held by banks other than the SBP.

Sources claim that there are about $400 million in LC cases that are still open, and the central bank will begin opening LCs soon.

Ishaq Dar, the finance minister, stated during a news conference earlier in the day that he anticipates the central bank’s reserves to reach $10 billion by the end of June.

He added that Pakistan is anticipated to get roughly $1.3 billion from China’s Industrial and Commercial Bank (ICBC). In the next few working days, Pakistan will get the first $500 million tranche, and the second $500 million tranche is anticipated in the following 10 days, after which the final $300 million will also be sent.

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