SBP increases rate of refinance

The State Bank of Pakistan (SBP) has increased the rate of refinance to 8.5 per cent per annum.

The State Bank of Pakistan (SBP) has increased the rate of refinance to 8.5 per cent per annum under the Export Finance Scheme (EFS). Earlier, the refinance rate was eight per cent.

“Effective July 1, 2010 and till further instructions, the rate of refinance shall be 8.5 per cent per annum,” the State Bank announced in a circular on Wednesday.

SBP asked commercial banks to ensure that where financing facilities are extended by them to the exporters for availing refinance facilities under the Export Finance Scheme, their maximum margin does not exceed one per cent per annum.

It said the financing facilities under Part-B (Export Sales) of the scheme for locally-manufactured machinery will also attract a similar mark-up rate structure.

“The reimbursement of mark-up rate benefit to exporters, on excess performance under Part-II of the scheme will be adjusted accordingly keeping in view the revised mark-up rates,” the SBP added.

The central bank has disbursed Rs190 billion till June 18 under the Export Finance Scheme, an SBP official said.


Former president Karachi Chamber of Commerce and Industry, Anjum Nisar, said exports are already under stress and this increase in the interest rate will mount the pressure on exporters.

“We are already facing lots of problems like law and order situation, energy shortage and visa issues. And this increase in the interest rate will push up the cost of borrowing,” he said.

Waiver to facilitate  exporters

In another circular, the State Bank extended the waiver for another 180 days for the purpose of availing financing under the Export Finance Scheme to facilitate exporters whose export proceeds are overdue.

“The period of waiver has been extended up to December 31, 2010. Other instructions on the subject will remain unchanged,” it said.

Published in The Express Tribune, July 1st, 2010.

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