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Textile body upset over revision of export refinance rate
Jan '11
The State Bank of Pakistan (SBP) has revised the Export Refinance rate and fixed it at 11 percent. Pakistan Textile Exporters Association (PTEA) has expressed its dissatisfaction over the same and stated that, this move of the Central Bank would prove detrimental and would badly hit the textile exports and domestic trading activities, as it would raise the cost of doing business in the country.

While the textile exporters have been continuously pressing the government for bringing down the mark-up rate on export refinance. Overlooking the same the government has raised it consecutively, PTEA said.

PTEA voiced its concern that, if the SBP sticks to the same policy, it would not only prove detrimental for the textile sector but would also badly hit the exporters particularly when the sector is already suffering due to issues like high power rates and gas tariffs.

Further, while the exporters in Pakistan are already overloaded with excessive prices of the inputs, tariffs and duties, factors like constant rise in the prices of petroleum products, Electricity and gas tariff charges have excessively raised the cost of production, thus endangering the subsistence of the sector as well as exports.

PTEA even went to the extent of saying that, the governments of other countries in the region were aiding their exporters by providing them with necessary facilities and incentives, whereas the Pakistani government seems to be trying to strangle its exporters.

As the industrialists are already experiencing financial crunch, such high export refinance rate of 11 percent together with the bank spread, would dampen the up-gradation and replenishment of the production line, PTEA said. It added that, the textile exporters were finding it difficult to exercise a hold on the turnover due to lack of cash inflow, which has lead to a fall in exports, and now as the central bank has set the mark up rate on commercial credit at such high level, this is seen to defeat the attempts of the exporters to raise their export turnover.

Fibre2fashion News Desk - India

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