Khalid Siraj Textile Mills Limited (KSTM) on Monday announced it will extend the shutdown of operations until May 31, citing issues ranging from the high cost of doing business to import restrictions as the ongoing economic crisis in Pakistan continues to take a toll on industries.

The yarn manufacturer disclosed the information in a notice to the Pakistan Stock Exchange (PSX).

“Further to our letter dated 10-02-2023 … kindly note that the situation has worsened due to continued political unrest, import restrictions, and an unchecked dollar increase. These factors have increased inflation, undermined the rupee, driven up cotton prices, driven up the cost of electricity per unit, and, most importantly, harmed business confidence,” read the notice.

“The mill management of the company has decided to close the mill operations until May 31, 2023,” it added.

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Back in February, KSTM had said it will shut its operations till March 31, citing similar issues.

The development comes as Pakistan’s economy is in dire straits, stricken by a balance-of-payments crisis as it attempts to service high levels of external debt amid political chaos and deteriorating security.

Meanwhile, inflation has skyrocketed, while the rupee has plummeted and the country continues to face a shortage of US dollar, which leaves little space for imports, causing a severe decline in industry.

The State Bank of Pakistan (SBP) on Friday, in a move to appease the International Monetary Fund (IMF). announced the removal of Cash Margin Requirement (CMR) on the import of goods.

Analysts said that the step has been taken to resume the IMF’s Extended Fund Facility (EFF) programme and get the loan tranche of $1.2 billion. Moreover, the removal of cash margin will support the ease of doing business in Pakistan as a number of companies were facing shortage of raw material due to imposition of cash margin restrictions, said analysts.