KARACHI : The State Bank of Pakistan intends to increase export re-finance (ERF) rate equivalent to six months Treasury Bills rates ie 12.35 percent. This information was shared by the State Bank during a meeting of the 7th Private Sector Credit Advisory Council (PSCAC) on Thursday, presided over by Deputy Governor Kamran Shahzad with all the directors of the SBP and presidents of banks.
Federal Advisor on Textile and Chairman Standing Committee on Banking, Credit and Finance of FPCCI Dr Mirza Ikhtiar Baig also attended the meeting. In his presentation, he expressed concern of business community on regular increase of the ERF rate, which now stands at 9 percent.He said the ERF is a concessional financing to boost the exports against which exporters have to give double the export performance of ERF. He urged the central bank to reduce ERF by at least 2 percent or 200 basis points keeping in view the support provided by regional competitors to their textile sector.He also requested the SBP to continue its long term financing facility (LTTF) for second-hand machinery, which has been expired on December 31, 2009. Dr Baig also urged the SBP to ask banks to provide moratorium and deferment of loans to their clients in accordance with the SBP policy for industrial debt moratorium and rescheduling.He drawn the SBPs attention towards banks investment in Treasury Bills and said it amounted to Rs 268 billion. Dr Baig also criticised dismal financing in SME sector by banks. He expressed serious reservation of FPCCI over the SBPs continued tight monetary policy, which is affecting our industrial growth.
The participants criticised excessive government borrowing from banks, which reduces the availability of the required money for the private sector. Dr Baig thanked the SBP Governor and his team for their supportive role to the private sector and expressed confidence for the better economic performance in future.
Courtesy: Business Recorder
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