SBP's significant role in textile industry's development
18 Jul '07
2 min read
The State Bank of Pakistan (SBP) has consistently lent a helping hand to the textile industry due to its strategic significance and contribution to the overall industrial output, exports and employment generation.
In the post-quota regime, the State Bank's support for the textile industry has been extensive and substantive recognizing the intense international competition faced by the industry.
Latest SBP exchange figures indicate that textile exports for July-March FY07 have grown by 10.3%. While in the first few months of FY07 textile exports grew somewhat slowly, it seems to have gained momentum in the last 5 months when the average growth recorded was 11.63%.
The composition of exports reflects that exports of yarn, knitwear, towels, synthetic textiles and made-up articles have picked up but few other categories such as cotton cloth, bed wear, and ready-made garments are growing slowly.
At the start of FY07, based on the suggestions from different textile bodies, the State Bank agreed to provide higher level of interest rate subsidy on export financing and long-term financing for exports.
Currently, the financing facilities to exporters under the Export Finance Scheme (EFS) are being offered for a six-month period at 7.5% which is around 3% below sixmonth Karachi Inter Bank Offered Rate (KIBOR), and facilities for import of eligible machinery for a period of up to 3 years under SBP's Scheme for Long Term Financing for Export Oriented Projects (LTF-EOP) are being offered to exporters in the range of 5% below the KIBOR of relevant maturities.
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