KARACHI, Feb 27: Exporters will get export loans at a maximum 5 per cent in March 2003 as the State Bank has lowered its export refinance rate by another half a percentage point to 3.5pc.

The SBP issued a circular on Thursday informing all the banks that the rate of refinance under its Export Finance Scheme applicable for the month of March 2003 shall be 3.5pc — down 50 basis points from 4pc applicable for February. “The commercial banks shall, however, ensure that where financing facilities are extended by them to the exporters for availing of refinance facilities under the Export Finance Scheme, their maximum margin/spread does not exceed 1.5pc.” This simply means that eligible exporters will get export loans from banks at 5pc next month.

The circular said that financing facilities under part B of the scheme for financing locally manufactured machinery shall also be made at the rates applicable on export financing i.e. at a maximum 5 per cent. The refinance rate would be 3.5 per cent.

Since July 2001 the export finance rate has fallen from 13 to 5 per cent — thanks to the SBP’s expansionary monetary policy that has forced the treasury bills rates down. Export finance rate is linked with the benchmark six-month T-bills rate.