Markup rate for EFS up by 2.5% to 5.5%

The State Bank of Pakistan (SB) has hiked the markup rate for financing under Export Finance Scheme (EFS) to 5.5%.

In a circular to all banks, the SBP has decided to increase the markup rate for financing under the EFS by 2.5% in line with the increase in the policy rate announced in the MPC meeting earlier today where the policy rate was hiked by 250 bps.

This brings up the mark rate for EFS part I and II to 5.5% per anum with effect from April 8, 2022.

The SBP says “till further instructions” which may be seen as an implication for a further hike in the future.

Despite the increased markup rate for EFS, the banks’ spread for corporate borrowers and SMEs remains unchanged at 1% and 2% respectively.

It is important to note that the revision in rates will not be applicable on financing under rupee based discounting facility of EFS which suggests that this may be a way to curb FX outflow in light of declining reserves and the PKR depreciation. 

Ariba Shahid
Ariba Shahid
The author is a business journalist at Profit. She can be reached at [email protected] or at twitter.com/AribaShahid

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