The State Bank of Pakistan on Friday announced increase in the rate of refinance under the Export Finance Scheme by one percent to 11 percent to meet the IMF condition. The IMF had asked the SBP to end subsidies on all export related financing in a phased manner.
The SBP said it has decided that the rate of refinance under the Export Finance Scheme applicable from January 1, 2011 and onward till further instructions shall be 10.00 percent pa from 9.00 percent. The commercial banks shall ensure that where financing facilities are extended by them to the exporters for availing refinance facilities under the Export Finance Scheme, their maximum margin/spread does not exceed one percent pa.
The financing facilities under Part-B (Export Sales) of the Scheme for financing Locally Manufactured Machinery shall also attract similar mark-up rate structure. The reimbursement of mark-up rate benefit to exporters, on excess performance under Part-II of the Scheme, as specified in SMEFD Circular No 15 dated October 31, 2009, will be adjusted accordingly keeping in view the revised mark-up rates. Other instructions on the subject shall remain unchanged. Now exporters can get financing for export purposes at 11 percent per annum, which definitely would raise the cost of export oriented products.
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