MoC tasked to formalise barter trade with Afghanistan

Finance ministry asked to implement proposals to use Pakistani currency for trade with neighbouring country

ISLAMABAD: The Ministry of Commerce (MoC) has been tasked to formally implement the proposal of barter trade with Kabul as Pakistan aims to improve and formalise trade with the neighbouring country.

According to sources, during a recent meeting chaired by Prime Minister Imran Khan, the proposal the ministry in this regard was discussed in detail after which the ministry was task to consult public and private stakeholders to formalise and implement the proposals, besides taking suggestions from the Ministry of Finance on how to handle the issue.

Sources said that it was also agreed to revisit existing options of trading in Pakistani rupee. The finance ministry has been asked to lead stakeholders’ deliberation and identify if this option is feasible and viable.

It may be recalled that the proposals of allowing trade with Afghanistan in local currency or currency swap agreements through land routes have been under discussion for a long time.

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During the said meeting, the Federal Board of Revenue (FBR) and other relevant authorities were also tasked with implementing the Risk Management System (RMS) on land routes, especially at the border with Afghanistan,  to streamline trade activities at the Pak-Afghan border. 

The system is presently active at sea ports. In the pilot phase that will last two months, trade of soapstone, cement, and coal would be tested. 

Pakistan Customs has been working to develop an Integrated Risk Management System (IRMS) through the Pakistan Single Window (PSW) through which trade regulatory bodies will be process certifications through a single integrated platform. This will bring the transformation in trading across the borders landscape and contribute immensely to the economic growth and national development of Pakistan.

The State Bank of Pakistan (SBP) has already extended the facility of cash convertible currencies as export proceeds for settlement of export to Afghanistan and Central Asian states, which expired on October 15, 2021. The facility has now been extended until December 31, 2021.

Under the facility, authorised dealers will accept cash convertible currencies brought over counters as export proceeds without asking for customs declaration for passengers.

On July 2, the SBP had issued a circular revising the procedures and made it mandatory for exporters to show evidence of dollars at the time of issuing E-form.

According to reports, to facilitate the exporters of perishable products, the government has allowed exports of fresh fruits, fresh vegetables, meat and fish in the Pak rupee to Afghanistan.

Pakistan’s imports from Afghanistan went up by 99pc to $18.960 million in July-August 2021 (2MFY22) from $9.514m over the same months of last fiscal year.

 

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Ghulam Abbas
The writer is a member of the staff at the Islamabad Bureau. He can be reached at [email protected]

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