Additional Rs190b financing for exporters
The State Bank of Pakistan (SBP) announced additional support of Rs190 billion for exporters and investors in the export-oriented sectors to safeguard against reduction in global export opportunities due to the pandemic.
The SBP said that in order to facilitate exporters, it has enhanced the limit of refinancing provided to the banks under Exports Finance Scheme (EFS) by Rs100bon.
"The banks will now have overall limits of Rs700bn for exporters for FY21," said the SBP.
Moreover, to promote export-oriented investment, Rs90bn have also been allocated under the Long Term Financing Facility (LTFF) for the FY21.
The amount is in addition to limit of Rs100bn already allocated to banks and financial institutions under Temporary Economic Relief Facility (TERF) -a concessionary refinance scheme for setting up of industrial units.
Since the emergence of Covid-19, the State Bank has taken several measures to help insulate the economy from the aftershocks of the pandemic. Meanwhile, safeguarding country's exports has been one of its key priorities. The SBP has provided a number of relaxations under the EFS and LTFF since March.
It provided additional period of six months for making shipment against loans availed under EFS Part-I. In addition, it also allowed additional period of six months for meeting required export performance against loans availed under EFS Part-II.
"The export performance of this extended period will also be considered for calculating the entitlement limit for FY21," said the SBP.
It also reduced showing export performance from two times to 1.5 times against financing availed during FY20 and FY21 and relaxed eligibility criteria for availing finance under the LTFF scheme.
Moreover, it also allowed deferment of principal amount for one year and rescheduling and restructuring of loans under the LTFF.
"It is expected that with the above already provided relaxations, which were widely appreciated by business community; above enhancement of around Rs190bn in limits will cater to exporters' cheaper liquidity requirement," said the SBP.
The central bank is closely monitoring the situation and is ready to take any further actions required to support the export sector, it added. Cheaper money has helped increase exports in the last two months despite the pandemic around the world.