In light of the government's policy to continue to offer below market rate financing to exporters, the State Bank of Pakistan (SBP) on Thursday announced the rate of refinance under the export finance scheme for September 2006 will be the same, ie, 6.5 percent per annum as was applicable in August 2006. This rate is 4 percent the Karachi Interbank Offered Rate (Kibor).
Banks shall charge a maximum margin/spread of one percent per annum on financing under the scheme and, therefore, final rate of export finance for exporters shall not exceed 7.5 percent per annum. (the SBP refinance rate 6.5 percent per annum plus 1 percent spread of banks). The financing facilities under part-B (export sales) of the export finance scheme for financing locally manufactured machinery will have similar mark-up rate structure.