FPCCI Welcomes 3% Cut in Export Refinance Facility, Calls It Lifeline for Exporters

PAKISTAN

The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has welcomed the banking sector’s voluntary decision to reduce the Export Refinance Facility (ERF) rate by 3 percent, bringing the end-user financing cost down to 4.50 percent. FPCCI President Atif Ikram Sheikh described the move as a timely relief for export-oriented industries and reiterated that export-led growth remains the only viable and sustainable path for Pakistan’s economy.

He said the reduction addresses FPCCI’s long-standing demand to rationalize the cost of capital and lower the cost of doing business, particularly for manufacturers and exporters struggling with high financing costs.

Atif Ikram Sheikh noted that the initiative currently falls within the existing ERF limit of Rs 1,052 billion, adding that the ceiling is designed to remain flexible and may be enhanced if the State Bank of Pakistan (SBP) or the Export-Import Bank of Pakistan (EXIM Bank) decide to increase the limit through June 2027.

He termed the 300 basis point reduction more than a routine adjustment, calling it a direct boost to the competitiveness of Pakistan’s manufacturing and export sectors. With the revised ERF rate of 4.50 percent, he said Pakistani exporters would be better positioned to compete with regional economies such as Bangladesh and Vietnam, where exporters have long benefited from low-cost financing.

The FPCCI president observed that the relief has come at a critical time when the private sector is actively supporting the government’s vision for economic recovery and export growth. He expressed optimism that the rate cut would encourage greater industrial borrowing.

Highlighting the 57 percent increase in the SME borrower base during the last fiscal year, he said the reduced ERF rate would help sustain momentum for small exporters who are most vulnerable to high borrowing costs.

Atif Ikram Sheikh further stated that FPCCI expects the reduction in financing cost to help push year-on-year export growth into positive territory, provided continued support is extended by the government and its institutions. He also appreciated the SBP’s role in facilitating exporters’ access to finance.

Reaffirming FPCCI’s commitment to working closely with the government, he said the reduced ERF rate would serve as a cornerstone for economic stability and export growth in 2026 and beyond. – ER News Desk

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