Toyota says the company is unable to meet the tentative delivery timelines of pending orders due to State Bank’s LC approval constraint for CKD import and drastic rupee devaluation. The company will soon announce the revised delivery schedule as well as the reopening of bookings.
The biggest challenge for the automakers is the import of Completely Knocked Down (CKD) kits for the local assembly of cars. The companies have to get their Letters of Credit (LCs) for the import of CKD kits approved by the State Bank of Pakistan (SBP). The bank has closed the issuance of LCs in a measure to stabilise the economy.
As the dollar rate is increasing and the value of Pakistani rupee is depreciating, the government wants to put a check on the dollar spending. Since the car companies import CKD kits and pay in dollars, they increase the country’s dollar expenses. So, the bank is not issuing the LCs for the CKD kits to help the government control the import bill and slow down the economy.