KARACHI: State Bank of Pakistan, while linking Export and long term financing facility with its Policy rate, increased markup rate 2% for financing under EFS and LTFF.
The new rates will apply on Export Finance Scheme (EFS), Islamic Export Refinance Scheme (IERS) and Long Term Financing Facility (LTFF) and Islamic Long Term Financing Facility (ILTFF) and come into effect from May 24, 2022, said a circular letter issued by Infrastructure, Housing, SME Finance Department of the central bank here on Monday.
Mark up rate for financing under EFS was enhanced from 5.5% per annum to 7.5% p.a while mark up rate for financing under LTFF was enhanced from 5% p.a. to 7% p.a.
The central bank has further decided, “in future, the rates of EFS and LTFF will be linked with SBP Policy Rate through a formula so that any change in policy rate is automatically reflected in rates of these refinance schemes.
The banking regulator also vowed that it will be ensured that rates on these SBP refinance facilities are maintained at such level that they continue to provide sufficient incentive to export sector of Pakistan.
On April 7, 2022 following policy rate increase by monitory policy committee (MPC), the central bank had revised financing rates under EFS by increasing the markup rate by 2.5% and EFS markup (both Part I and Part II) reached at 5.5% p.a. while banks’ spread for corporate borrowers and SME borrowers was left unchanged i.e. 1% & 2% respectively.
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