ISLAMABAD - Pakistan on Tuesday approved imports from neighbouring Afghanistan in exchange for local currency, a move mainly aimed at buying coal to help ease an energy shortage.

The decision was taken in a meeting of Pakistan's Economic Coordination Committee (ECC), a finance ministry statement said.

The ECC approved amendment in the Import Policy Order 2022 "to allow import of goods of Afghan origin against Pak Rupee" for a period of one year, it said.

The move is aimed at importing Afghan coal for Pakistan as it faces an energy crisis due to a shortage of foreign reserves to buy LNG or oil in the international market to run its power plants.

Prime Minister Shehbaz Sharif announced plans last week to import coal from Afghanistan using local currency to save foreign reserves.

Islamabad has already announced an easy visa regime for Afghan nationals to help facilitate trade on both sides of the border. An Afghan finance ministry spokesman did not immediately respond to request for comment.

Customs duties from coal exported to Pakistan are a key source of revenue for cash-strapped Afghanistan. Sanctions on the banking sector and the cut in development aid since the Taliban took control last August year have severely hampered its economy.

No country has officially recognised the Taliban government, which has meant international financial assistance has dried up while Afghanistan faces a humanitarian and economic crisis.

The Afghan Taliban have lately stepped up coal exports to Pakistan to generate more revenue from its mining sector in the absence of direct foreign funding.

Kabul has raised duties on sales and increased rates recently.

Pakistan has also been facing an economic crises, with foreign reserves falling as low as hardly enough for 45 days of imports.

(Reporting by Asif Shahzad in Islamabad and Charlotte Greenfield in Kabul; Editing by Angus MacSwan)