TMA seeks cut in export refinance rate

Towel Manufacturers' Association of Pakistan (TMA) has demanded that cut in export refinance rate be announced by the State Bank of Pakistan in line with mark-up rate cut. This is necessary for reactivating country's declining exports which would boost not only foreign exchange earnings but also foreign exchange reserves of the country, according to TMA Chairman Mehtabuddin Chawla.
While welcoming the SBP's announcement reducing mark-up rate by 50 basis points, he drew SBP Governor Yaseen Anwer's attention in a letter sent to him on December 17 that discount rate and export refinance rate are inter-related but SBP has not given any relief to the exporters in export refinance rates which are on higher side and needs to be revisited by central bank of the country.
Moreover, he said in view of slump in international markets, energy crisis prevailing in the country and low cost of doing business in neighbouring countries, our exporters are unable to compete with them. According to TMA, as per SBP circular rates of mark-up vary from time to time as under:

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Date                 Mark up Rate      EFR

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01st August 2011        13.50%         10%

10th October 2011       12.00%         10%

13th August 2012        10.50%         10%

10th September 2012     10.50%       9.50%

08th October 2012       10.00%       9.50%

14th December 2012       9.50%       9.50%

Reduction in Rates          4%       0.50%

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