The State Bank of Pakistan (SBP) has further revised the rates of specialized financing schemes in line with its tightened monetary policy rate of 16 percent.
According to the circular issued by the central bank, the mark-up rate for financing under Export Finance Scheme (EFS) has been increased by 200 basis points from 11 percent per annum to 13 percent per annum and the mark-up rate for financing under Long Term Financing Facility (LTFF) is increased to 13 percent per annum.
The revised rates will be effective from December 30th, 2022, read the notification.
“Further, as mentioned in above referred circular, in [the] future with any change in the SBP policy rate, markup rates for EFS and LTFF will be revised automatically so that the gap between [the] policy rate and EFS & LTFF rates is maintained at 3%,” SBP added.
This combined action continues the monetary tightening underway since September, which is aimed at ensuring a soft landing of the economy amid an exceptionally challenging and uncertain fiscal downpour. Higher financing rates are expected to raise the cost of doing business for exporters and manufacturers, who are already feeling the pinch of high inflationary pressures in tandem with record increases in energy costs.
Exporters of various goods and services may also have difficulty offering competitive prices to their buyers and suppliers in international markets.
