LCCI Praises Govt's Decisions To Stimulate Trade, Stabilise Economy

The Lahore Chamber of Commerce and Industry (LCCI) Saturday appreciated the government's recent policy decisions aimed at stimulating trade, stabilising economy and reducing business costs

LAHORE, (UrduPoint / Pakistan Point News - 3rd Jun, 2023 ):The Lahore Chamber of Commerce and Industry (LCCI) Saturday appreciated the government's recent policy decisions aimed at stimulating trade, stabilising economy and reducing business costs.

LCCI President Kashif Anwar, Senior Vice President Zafar Mahmood Chaudhry and Vice President Adnan Khalid Butt told the media here that they supported two significant circulars, recently issued by the State Bank of Pakistan (SBP) and the Ministry of Commerce.

In a remarkable move to enhance trade relations, reduce the cost of doing business, and stabilise the economy, the government has implemented a barter trade mechanism with Afghanistan, Iran, and Russia that permits state-owned enterprises and private sector entities to engage in the import and export of goods, including petroleum and natural gas.

The LCCI office-bearers said this includes the import of oil and energy from Russia, which not only contributes to reducing the cost of petroleum products but also strengthens energy security. They said under the barter trade arrangement, the principle of "import followed by export" would be followed, ensuring that exports match the value of imported goods. This innovative trade approach opens up opportunities for Pakistani businesses to export 26 identified goods including milk, eggs, cereal, meat and fish products, fruit and vegetables, rice, salt, pharmaceutical products, leather apparel, footwear, steel, and sports goods to Afghanistan, Iran, and Russia. Simultaneously, Pakistan can import a range of products, including fruits, vegetables, spices, minerals, coal, rubber items, cotton, pulses, wheat, petroleum oils, fertilizers, plastic and rubber articles, metals, chemicals, and textile machinery from these countries, they said, adding that implementation of this barter trade mechanism is expected to significantly reduce the cost of doing business and stabilize Pakistan's economy. It will increase foreign reserves, address the country's balance of payments crisis, reduce the reliance on dollar transactions, and bring much-needed relief to businesses, thereby enhancing the overall business environment.

In another move and to further streamline cross-border transactions, reduce business costs, and maintain stability in foreign exchange rates, the SBP granted banks permission to acquire US dollars from the interbank market.

This short-term measure aims to alleviate pressure on exchange companies and enable customers to benefit from lower exchange rates. The permission granted to banks will remain valid until July 31.

Previously, customers conducting card-based cross-border transactions were subjected to the open-market USD rate, resulting in a considerable disparity between the interbank and open-market rates. By allowing banks to purchase dollars from the interbank market, this circular has effectively reduced the open-market dollar rate by Rs20-25. This step not only reduces the cost of cross-border transactions but also narrows the gap between the interbank and open-market rates, contributing to a more stable business environment.

LCCI officials have expressed their support for these policy decisions, recognizing their potential to enhance trade, stabilize the economy, reduce business costs, and strengthen energy security. The reduction in petroleum prices, made possible through the import of oil from Russia, will directly benefit businesses and consumers alike. By promoting barter trade, facilitating smoother cross-border transactions, and reducing the reliance on dollar transactions, these measures create a more favorable business environment in Pakistan.

The business community and stakeholders in Pakistan are optimistic about the future, anticipating increased trade volumes, reduced market disparities, lower energy costs, and a strengthened economy. The government's proactive approach in implementing these measures demonstrates its commitment to addressing economic challenges, fostering trade growth, ensuring energy security, reduce inflation and ensuring a conducive environment for businesses to thrive.

In conclusion, the barter trade authorization, coupled with the acquisition of US dollars for cross-border transactions and the reduction in petroleum prices through oil imports from Russia, represents a significant stride towards boosting trade, stabilizing the economy, reducing business costs, and enhancing energy security. The Lahore Chamber of Commerce and Industry applauds these decisions and anticipates their positive impact on Pakistan's business landscape.