FPCCI Hails 3% ERF Cut to Boost Export-led Growth

Karachi: The President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), Mr. Atif Ikram Sheikh, has welcomed with enthusiasm the banking sector’s decision to reduce the Export Refinance Facility (ERF) rate by 3%, making it a competitive 4.50%. This move directly addresses FPCCI’s long-standing demand for rationalizing capital costs and reducing the expenses of doing business.

Speaking on behalf of the chamber, Mr. Sheikh highlighted that this timely reduction effectively alleviates the burden on export-oriented industries. He asserted that the initiative is currently subject to an existing ERF limit of Rs1,052 billion—though designed to be flexible—and may increase as per decisions from the State Bank of Pakistan (SBP) or Export-Import Bank of Pakistan (EXIM Bank).

Mr. Sheikh elaborated on this reduction not merely as a monetary adjustment but as a strategic boost for the manufacturing and export sectors, enhancing their competitiveness against regional competitors such as Bangladesh and Vietnam, whose historically lower financing costs have presented challenges.

He stressed that with an ERF rate now at 4.50%, Pakistani exporters are more prepared to compete internationally. “This is a crucial moment,” Mr. Sheikh stated, “as the private sector aims to support the government’s vision for robust economic recovery and increased export growth.”

The FPCCI leader projected that this reduced ERF would bolster industrial borrowing, especially during an uncertain global environment. He also noted the 57% rise in SME borrower base over the previous fiscal year, emphasizing how a lower rate of 4.50% will sustain this growth trend for small exporters who often face higher financing costs.

Mr. Sheikh outlined that the FPCCI expects continued government support to sustain and accelerate this positive trajectory, appreciating SBP’s facilitation role in helping exporters access financial resources. He affirmed that the reduced ERF rates would serve as a cornerstone for economic stability into 2026 and beyond.

The FPCCI has reiterated its commitment to collaboration with the government toward achieving national export targets. Mr. Sheikh concluded by expressing confidence in these reductions, noting they could propel year-on-year export growth positively if supported further from both governmental bodies and financial institutions.

Brig Iftikhar Opel, SI (M), Retd., Secretary General of FPCCI, endorsed this outlook for economic stability and sustainable growth through the facilitation provided by State Bank of Pakistan (SBP).