Banks cut export refinance rate to 4.5%

The local banking sector has announced a voluntary 3% reduction in the rate of return for the export sector, bringing the markup rate under the Export Refinance Facility down to 4.5%. The move is expected to lower business costs for exporters and help boost foreign exchange earnings. Commercial banks have implemented the relief for exporters on all new loans as well as rollover loans, with the facility remaining effective until June 2026. According to the Pakistan Banks' Association (PBA), private sector credit recorded a significant increase of Rs1.1 trillion in 2025, while credit disbursement to the agriculture sector reached a record Rs2.58 trillion. The PBA said the number of agricultural borrowers rose from 2.7 million to 3.0 million. PBA Chairman Zafar Masud said that during the first half of fiscal year 2026, private sector credit expanded by a further Rs654 billion, while banks also financed government borrowing amounting to a substantial Rs1.95 trillion.