- APTMA says members are considering depositing $2 billion with SBP as a support measure.
- The offer follows Pakistan’s plan to return a $2 billion (+ interest) UAE deposit held at SBP by month-end.
- APTMA says it wants to prevent financial strain and signals backing for the government during a sensitive period.
- The association plans to meet the prime minister after ongoing peace talks to formalise the mechanism.
- The impact will depend on execution details like timing, tenure, and the source of dollars.
What APTMA Announced and Why It Matters
The All Pakistan Textile Mills Association (APTMA) says its members are considering placing a $2 billion fund with the State Bank of Pakistan (SBP) as a support measure. The statement comes as Pakistan prepares to return a separate $2 billion deposit (plus interest) to the United Arab Emirates by the end of the month.
In simple terms, this is about confidence and short-term financing. When a large external deposit held at SBP is returned, it can tighten the country’s external position and raise market questions about reserves and near-term inflows. APTMA’s proposal appears aimed at reducing that immediate pressure through a locally backed dollar cushion.
APTMA Chairman Kamran Arshad said the industry stands shoulder to shoulder with the government and will not allow financial difficulty to emerge. The message is designed to reassure markets that a major export sector is willing to support stability when external funding shifts.
Why the UAE Deposit Return Changes the Monthly Picture
APTMA says Pakistan has decided to return the UAE’s $2 billion deposit kept at SBP as a safe deposit, along with interest, by month-end. Deposits of this type are often treated as a confidence anchor. Even if they are not used for day-to-day spending, they strengthen headline reserves and can support sentiment in currency and trade markets.
When such funds leave, timing matters. If repayment happens during a period of heavy import demand or debt payments, it can increase uncertainty. That uncertainty can show up in exchange-rate pressure, higher hedging costs for importers, and tighter conditions for businesses planning foreign payments.
This is where the textile industry’s offer becomes relevant. Textiles are among Pakistan’s biggest export earners. When exporters offer a structured support move, it can help ease fears of a sudden gap, at least temporarily.
How a $2 Billion SBP Support Fund Could Be Structured
APTMA describes the idea as a “deposit” with SBP, but the structure will determine whether it becomes a real stabilising tool or only a headline.
Possible models include:
- A foreign currency deposit held at SBP for a fixed tenure
- A bank-led arrangement backed by exporters
- A facility linked to export proceeds or advance payments
Each model has trade-offs. A direct deposit may be quickest, but exporters will ask how dollars are sourced and what return or protection they receive. A bank-led structure can spread risk but may take longer to finalise. An export-linked approach may be more sustainable, but it depends on steady inflows and clear compliance rules.
APTMA says it plans to meet Prime Minister Shehbaz Sharif after ongoing peace talks to work out a formal solution. That suggests the industry wants clarity on timelines, tenure, safeguards, and the legal framework before committing funds.
What to Watch Next for Markets and Exporters
APTMA also claims Pakistan has fulfilled IMF conditions and that exports are rising rapidly, strengthening the outlook. For markets, the next step is verification through action: when will funds be deposited, for how long, and under what withdrawal rules?
If implemented cleanly, the support fund can act as a bridge—reducing immediate pressure after a large external deposit is returned, while the government manages longer-term inflows. But the plan must avoid harming exporters’ own working capital, because export operations require steady liquidity for raw materials, energy costs, and shipping.
For the textile sector, the sustainability question matters. If exporters support stability, they will also watch for predictable policy signals—such as smoother refunds, reliable energy arrangements, and consistent trade facilitation—so that the sector can keep earning dollars.
The bottom line is that the announcement highlights a real lever Pakistan has: export sectors can support the external account during shocks. But credibility will depend on transparent execution and clear, practical terms.
