The President of the Korangi Association of Trade and Industry (KATI), Muhammad Ikram Rajput, today welcomed a decision by banks and financial institutions to lower the interest rate on the Export Refinance Facility (ERF) by three percent, viewing it as a critical step towards export-led economic growth.
In a statement, Rajput noted that the voluntary reduction, facilitated under the leadership of the State Bank, brings the new ERF rate to 4.5 percent. He believes this will provide exporters with substantial opportunities to increase their overseas sales and inject new energy into the nation”s industrial sector.
The KATI President asserted that the interest rate decrease will significantly lower production costs for Pakistani exporters, enhancing their ability to compete with rival countries in the region. He anticipates that the decision will not only help secure more export orders but also contribute to stabilising foreign exchange reserves and narrowing the trade deficit.
Rajput identified previously high interest rates as a major impediment to industrial growth, which had placed many export-oriented units under severe financial pressure. The recent cut is expected to improve cash flow, increase production efficiency, and encourage industrialists, including small and medium-sized exporters (SMEs), to invest in modern technology.
He highlighted that the Korangi Industrial Area, a vital hub for the country’s exports, is poised to directly benefit from this move. Industries within sectors such as textiles, leather, garments, and engineering will experience a positive impact, leading to an accelerated industrial process, enhanced production, and the creation of new employment opportunities.
Looking forward, President KATI expressed hope that the government will introduce a long-term, sustainable policy framework for the export sector. He emphasised that further measures like stabilising energy prices, ensuring the timely payment of refunds, and simplifying banking procedures could provide a significant additional boost to exports.