(Bloomberg) -- Pakistan’s central bank has increased the amount of red tape needed to access dollars, according to people with knowledge of the matter, as the nation’s foreign-exchange reserves drop at the fastest pace in Asia.

The State Bank of Pakistan has told banks after a currency devaluation last month that importers will need to inform the regulator of any requests for the U.S. currency a day in advance and fill out a form for import payments, according to people familiar with the matter, who asked not to be identified as they are not authorized to speak to the media. The measure applies to transactions that are not backed by a bank’s letter of credit, said one of the people. The Karachi-based central bank didn’t respond to a request for comment.

The finances of South Asia’s second largest economy are showing increased vulnerability ahead of elections in two weeks. Dollar reserves have dropped to the lowest level in more than three and a half years and record imports have widened the current-account deficit. Pakistan has devalued its currency three times since December in an attempt to ease the pressure.

“Once you go into high current account deficit and reserves deplete, this happens,” said Asad Sayeed, director at the Karachi-based consultancy Collective for Social Science Research. “Investments are going to be affected. Your high growth time is over now.”

Pakistan’s economy faces “some very daunting challenges,” but the decision to approach the International Monetary Fund for support will have to be taken by the new government after the July 25 ballot, according to caretaker finance minister Shamshad Akhtar. Moody’s Investors Service revised its outlook downward to negative from stable in June citing heightened external vulnerability risk, according to a statement.

“On the external front, there is a need to arrange external financing in the short-term, and resolve structural issues affecting competitiveness in the medium and long term,” the central bank said in a quarterly report on Wednesday.

Pakistan’s central bank has also doubled its local currency swap deal with People’s Bank of China, the nation’s largest trading partner, and is encouraging banks to make payments in dollar transactions, according to central bank statements. China is financing the construction of power plants and infrastructure projects worth about $60 billion as part of the Belt and Road initiative that has helped limit power blackouts, but has also increased Pakistan’s machinery imports.

To contact the reporter on this story: Faseeh Mangi in Karachi at fmangi@bloomberg.net

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Chris Kay

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