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  • Jul 1st, 2005
  • Comments Off on Methodology for calculation of EFS rates changed
The State Bank of Pakistan (SBP) on Thursday changed the methodology for calculation of Export Finance Scheme (EFS) rates. The rates under EFS will be determined on the basis of the weighted average yields on six months T-bills during the preceding three months. Under the revised procedure, the rate of refinance under the EFS applicable for July 2005 has accordingly been fixed at 7.50 percent per annum.

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 1.5 percent per annum.

The SBP had linked the EFS rates with the six months T-Bills and these rates were being adjusted on a monthly basis with the movement of the weighted average yields during the preceding month. During the last few months, the rates of EFS, which were coming down, have started moving up with the increase in weighted average yields on six months T-Bills.

In order to avoid a sharp increase during a particular month, the State Bank, based on the feedback and suggestions from various trade associations, has changed the methodology of calculation of these rates to an average of the preceding three months. This new methodology of calculation of EFS rates will remain in force till further instructions.-PR

Copyright Business Recorder, 2005


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