The Central Bank’s short-term Road Map unveiled yesterday listed 20 specific initiatives in the next six months to stabilise the economy and boost growth. They are as follows:
- Intervene in the FX market by providing the funds to finance the country’s energy bills, and thereby to infuse liquidity
- Promote investments in rupee-denominated Government securities with a guarantee on the exchange rate
- Strengthen mandatory conversion of export proceeds
- Request the Government to tax profits of exporters at 28% and not 14% where forex is not repatriated and converted
- Expand the moratorium while also providing liquidity support to affected finance companies
- Stop parate executions and repossession of vehicles in the next six months for pandemic-affected borrowers
- Share the burden of pandemic losses suffered by local SMEs by allocating Rs. 15 billion towards interest accrued, through a mechanism which is to be worked out
- Use monetary policy tools to unwind monetary stimulus extended during the pandemic
- Use macroprudential tools as well as microprudential regulation and supervision to guide the financial sector towards sustained stability
- Facilitate education and health-related forex outflows immediately
- Lift the ceiling imposed on outward investment and migration allowances in January 2022
- Discontinue cash margin deposit requirements on “nonessential/non-urgent imports” with immediate effect
- Establish the International Transactions Reporting System (ITRS) to monitor foreign exchange transactions commencing 1 January 2022
- Monitor services related foreign exchange inflows and ensure due repatriation and conversion
- Replace maturing debt obligations with new inflows through non-debt sources, wherever possible
- Consider the possibility of buying back the entire issue of ISBs maturing in January 2022 and/or July 2022, if high discounts are prevalent in the market
- Replace maturing ISBs with Government-to-Government loans until ISBs/GDP ratio declines to 10% or less
- Take measures to improve sovereign ratings
- Strengthen workers’ remittances through official channels
- Encourage forex transactions through formal channels with the restoration of licences of money changers
