THE State Bank of Pakistan (SBP) recently issued an Exchange Policy Department (EPD) circular regarding the realisation of export proceeds. As per the circular, authorised dealers will bind export-oriented units to provide exchange rate of the date of realisation of export proceeds or the date on which export proceeds become overdue, whichever is lower.

The bank concerned will prepare a consolidated statement regarding all such differences collected by the authorised dealers which will be submitted by the head/principal offices of the authorised dealers to the Foreign Exchange Operations Department (FEOD) of SBP and Banking Services Corporation (BSC) on a weekly basis.

On the basis of these documents, the SBP-BSC will file a complaint with the Foreign Exchange Adjudication Department (FEAD), with respect to delay in the realisation of the proceeds of the exporters.

The authorised dealer (bank) will deposit the said difference to the SBP, or refund the same to the exporter, as decided by FEAD.

The export-oriented sector is already facing numerous challenges as well as risks because the exporters are dealing with international buyers. One of the major threats they are facing is a delay in the repatriation of their amounts and in some cases even their buyers have defaulted on payments.

In case ofdelayin the repatriation of their amounts, the exporters face financial losses, and it does not help one bit thattheyhave topresentjustincations to the SBP which means wasting a great deal of time. This time, logically speaking, should be spent focussing onways to enhance the country`s exports that represent the backbone of the national economy and play a vital role in sustaining domestic economic activities.

In my opinion, exporters are not willing to repatriate their export proceedslate,and eachandeveryunitis trying its best to repatriate such proceeds as soon as possible for the improvement of cash liquidity as well as to avoid the cost of money.

If the exporters have enough money to purchase raw material, they will do it as soon as possible because of high inflation in the country, which means unstable prices moving northwards without a prior hint.

The SBP should relax the application of the new regulation, and provide the exporters the rate applicable to the date of realisation, or the higher rate between the date of realisation and the due date. The government already has a payment backlog of 120-180 days which in itself is a big challenge for the exporters.

The government should chalk out a comprehensive strategy to protect the interest of the exporters.

The trade officers stationed all over the world should support the exporters for the survival of the critical sector.

Yahqub Lodhi Karachi