Rate slashed to 5pc for two SBP schemes.

KARACHI -- The State Bank of Pakistan (SBP) on Thursday further slashed the interest rate for two refinance schemes to five per cent to boost long-term investment both in domestic and export-oriented sectors.

'To further improve the incentive under the BMR scheme (balancing, modernisation and restructuring), the SBP has lowered the end user mark-up rates from existing 7pc to 5pc,' a press release said.

Since mid-March, the central bank has reduced the key policy rate by 625 basis points to 7pc.

To extend the benefits of this reduction to users of refinance schemes, the SBP has now decided to align the end user markup rates for promoting investment in the country.

Specifically, it has curtailed the end user markup rates on Temporary Economic Refinance Facility (TERF) to 5pc from existing 7pc and on Long-Term Financing Facility (LTFF) for non-textile sector to 5pc, from 6pc.

The central bank introduced the Temporary Economic Refinance Facility (TERF) to provide stimulus to the economy by supporting new investment and BMR of the existing projects.

'The SBP will now be providing refinance to banks at 1pc with banks' maximum margin of 4pc,' the press release said. It has also allowed TERF in cases where letter of credits/inland LCs were opened prior but...

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