ICCI demands cut in export refinance rate

  • July 09, 2010
Islamabad Chamber of Commerce & Industry (ICCI) has called upon the State Bank of Pakistan (SBP) to bring down Export Refinance Rate for current more than 8 percent to 5 percent and facilitate growth of exports.

Chairing a meeting of businessmen,Mr. Karim Aziz Malik, Acting President, ICCI said that export refinance rate should not be more than 5 percent as high interest rate hurts businesses and makes funds more expensive for them. He said due to this situation, value-added exports have already come down.

He said export refinance scheme was introduced more than 30 years ago with prime objective to provide loans on comparatively lower interest rates to exporters. However, sufficient increase in this rate has adversely affected exports and jobs.

Mr.Karim Aziz Malik said that Export Refinance Scheme should particularly focus on providing more funds to boost the exports of non-traditional items. He said Pakistan has great potential to increase exports of these items and government should play its positive role to support exporters of this sector.

Businessmen said that currently they are not getting any kind of useful support from the government and are promoting country’s exports only with their individual efforts.

They said the big issue is that there is no proper planning on the part of government to diversify & increase exports and this state of affairs is multiplying problems for them. They said government should work for providing exporters easy access to Europe and other countries and also offer them different incentives.

They said high cost of doing business, tight monetary policy, high export refinance rate etc. are the factors that have made our exports more costly and rendered them uncompetitive in international market. They said government should urgently come forward to address these issues.

Mr.Karim Aziz Malik said China is providing all possible cooperation & support to its exporters. The result is that China has now dominated the international markets and is almost ruling the world in exports.

He said that businessmen can significantly enhance country’s exports provided that the government extends them its full support, brings down interest rate to single digit, allocates more funds under Export Refinance Scheme and cuts refinance rate to provide cheap finance to export sector.