Banks will charge 5 per cent maximum markup on export loans in December 2004. To May 2004 they were charging 3 per cent but a gradual hike in the State Bank's refinance rate has made
export loans dearer by two percentage points within six months.
The central bank announced it had raised the export refinance rate by half a percentage point to 3.5 per cent for December 2004. It said they might charge a maximum spread of 1.5 per
cent over this while pricing export loans.
Exporters feel uneasy over this huge increase in export finance rate within six months. "This will definitely have an adverse impact on exports," said Mr Riaz Ahmed Tata, president of the Federation of Pakistan Chambers of Commerce and Industry or FPCCI.
