KARACHI: In a move to encourage timely inflow of export proceeds to boost foreign exchange reserves, the State Bank of Pakistan (SBP) on Wednesday allowed exporters to get more discounts on borrowing against their future proceeds.
“The State Bank has enhanced the scope of Export Finance Scheme (EFS) — both conventional as well as Sharia-based — allowing the exporters to obtain financing against their export proceeds through discounting of export bills or receivables,” the SBP circular said.
Discounting of bills or receivables is essentially a financial transaction where the exporter surrenders its future export proceeds and obtains financing in rupees for the remainder of the period of exports proceeds realisation.
“This initiative will help exporters meet their working capital needs and also incentivise them to bring in their export proceeds on time that will help to improve foreign exchange inflows in the interbank market,” said the SBP.
Exporters can obtain financing from banks by discounting their export bills or receivables (both post-shipment and pre-shipment) under this scheme, at rates ranging from 2pc to 3pc depending upon the tenor of discounting.
Meanwhile, the government raised Rs106.92 billion through the auction of Pakistan Investment Bonds (PIBs) while the cut-off yields were reduced by up to 11 basis points.
The government raised Rs4bn for three-year PIBs at a cut-off yield of 10.69 per cent, down by 10 basis points.
An amount of Rs45bn was raised for five-year PIBs at a cut-off yield of 10.75pc, down by 10 basis points. The 10-year PIBs faced a decline of 11 basis points in the yield but the government raised the highest amount of Rs50.53bn at 10.86pc.
