ISLAMABAD: International Monetary Fund (IMF) has recommended Pakistan to withdraw regulatory duties and cash margin requirement as such measures may not help in reducing external imbalances but can adversely impact competitiveness.
The IMF in its recent report cautioned the authorities against the use of administrative measures to reduce the external imbalances.
“Regulatory duties on imports, cash margin requirements, and the export support package are unlikely to facilitate a sufficient external adjustment in the absence of continued exchange rate flexibility,” the IMF said.
These measures may also adversely impact competitiveness in the medium term with distortions and increased dependency on regulatory protection and fiscal incentives.
The IMF recommended the authorities to remove the regulatory duties and cash margin requirements as soon as conditions allow.
