October 1, 2002	Tuesday	Rajab 23, 1423

KARACHI, Sept 30: The exporters would continue to get export finance at 8 per cent markup for the seventh consecutive month in October 2002 as the State Bank has left the export refinance rate unchanged at 6.5 per cent.

The SBP announced this decision through a circular (BPD no 26) issued to all the banks.

The SBP had last changed the export refinance rate in April.

The circular said financing and refinancing under part-B (export sales) of the scheme for locally manufactured machinery will also be made at 8 per cent and 6.5 per cent.

The rate of export finance is the maximum rate at which the banks lend money to the exporters under export finance scheme. Export refinance rate is the rate at which the State Bank makes reimbursement against such financing.

Since the export refinance rate is 6.5 per cent and the export finance rate is 8 per cent the banks earn a spread of 1.5 per cent on export financing.

What keeps these rates unchanged for the seventh consecutive month is that the treasury bills rate (that provide benchmark for export finance rate) have been stable.