The government on Monday said relaxation on retiring of Letters of Credit (LCs), recently announced by the State Bank of Pakistan (SBP), is not unrestrained as LCs will only be honoured if sufficient inflows of dollars come into the country.
This information was shared by the Ministry of Industries and Production (MoI&P) informally with National Assembly Standing Committee on Industries and Production, Syed Ghulam Mustafa Shah.
Additional Secretary in charge, MoI&P, Momin and Chief Executive Officer (CEO) of Engineering Development Board (EDB) Raza Abbas Shah briefed the Standing Committee that slow economic activity and higher interest rates led to a fall in car production by 43%.r
It was further informed that 1,133,072 units (cars, jeeps, SUVs etc) were manufactured during the first ten months of FY 2022-23 against 2,271,991 units during CF 2021-22, probably the highest number in history.
According to Additional Secretary in Charge MoI&P, the main reason for the reduction in production was the dollar shortage, which led to lower imports of car parts and raw materials. In addition, car financing also declined due to higher interest rates. Honda and Suzuki plants suffered closure due to the non-availability of parts.
