KARACHI, Feb 26: Exporters will get export finance from banks at 7.5 per cent in March instead of 8.5 per cent as the State Bank has made another one per cent cut in its export refinance rate.

In a press release issued on Tuesday the SBP said it had cut the export refinance to 6 per cent for March 2002. It said that banks may charge a maximum spread of 1.5 per cent on this rate while lending money to the exporters under the export finance scheme. In other words export finance would be available at 7.5 per cent in March 2002.

The State Bank said that the same rate apply on the financing facility under part B of export finance scheme and for financing locally manufactured machinery in March 2002.

For February export refinance rate was 7 per cent and banks were allowed to charge a spread of 1.5 per cent over this rate. So banks were offering export finance at 8.5 per cent under the export finance scheme.

The State Bank fixes monthly export refinance rate at a level equal to the weighted average yield of six-month treasury bills in the preceding month.

Since the weighted average yield on six-month T-bills comes to 6 per cent in February the export refinance rate has been fixed at the same level for March. Now as the banks are allowed to charge a spread of 1.5 per cent on this rate the export finance rate applicable on permissible export financing would be 7.5 per cent in March.

The markup on export financing has fallen from 13 per cent in July this year to 7.5 per cent in March—thanks to a rapid fall in the treasury bills rates.