The State Bank of Pakistan has raised export refinance rate by 0.5 percent to 3.5 percent for December 2004. The SBP issued a circular on Tuesday with the new rate of return on export refinance, which was expected, as it is attached with the return on 6-month treasury bills. The return on six-month T-bills has reached 3.8 percent.
"It has been decided that rate of refinance under the Export Finance Scheme applicable for the month of December 2004 shall be 3.5 percent p a," said a circular issued by the SBP.
The commercial banks shall, however, ensure that where financing facilities are extended by them to the exporters for availing refinance facilities under the Export Finance Scheme, their maximum margin or spread does not exceed 1.5 percent p a.
The financing facilities under Part-B (Export Sales) of the Scheme for financing Locally Manufactured Machinery will also attract similar mark-up rate structure, the circular said.