SBP makes account opening mandatory for buying $2,000 or above.

KARACHI -- In a major move to restrict dollar outflows, the State Bank of Pakistan (SBP) has made it mandatory to open an account before buying $2,000 or above.

State Minister for Finance Aisha Ghaus Pasha on Wednesday informed this to the Senate's Standing Committee on Finance which met in Islamabad.

The government and the SBP have taken several steps to get control over the dollar outflows. Finance Minister Ishaq Dar, who expressed confidence to meet the external account requirements during the current fiscal year, is being criticised for his failure to bring the dollar rate below Rs200 and replenish the country's dwindling foreign exchange reserves.

Curbs on the opening of letters of credit (LCs) have already affected industrial activities as many sectors were complaining about a shortage of raw materials and parts. No official figures about the stuck-up LCs are available but the importers claim it could be around $1 billion.

At the same time, the importers are found in a long queue to get permission for the LC opening. This is not easy since the banks are facing poor inflows of dollars which makes it harder to meet the importers' demand. The cut in imports particularly raw materials has created a serious problem for the export industry.

Meanwhile, the All Pakistan Textile Mills Association has recently asked the prime minister to save the export industry from collapsing due to the sudden stoppage of gas supply in Sindh and Balochistan. Exporters said November was the worst month for the export industry and the country could face another shock with low proceeds.

A senior banker said the central bank has been...