PTA opposes bank rate hike
6 January 2010Gulzar Firoz, chairman, Pakistan Tanners Association (PTA) in a press release issued on January 6, strongly opposed the State Bank of Pakistan's decision for an increase in the mark-up rate by 0.5% for the Export Refinance Scheme (EFS) effective from January 1, 2010.
The PTA has been pressing the government for a reduction in the bank interest rates on export re-finance. The State Bank of Pakistan have however, raised the rate first from 6% to 7% and soon thereafter from 7% to 7.5% instead of lowering it.
According to the banks own information the commercial banks have stated that their minimum margin/spread does not exceed 1% per annum and exporters can borrow loans for exports at 8.5% per annum in 2010 which will effect exporters adversely say the PTA.
Firoz added that the mark-up rates under Export Refinance Scheme are already on the high side and there is no justification for a further increase. The cost of doing business will increase further and Pakistani made products will be less competitive on the world market he stated.
