Karachi July 7 2022: State Bank of Pakistan has decided to increase the markup rate for financing under Long Term Financing Facility (LTFF) to 300 basis points in line with the revised decision to keep this rate at 5% below the policy rate in today’s Monetary Policy Meeting.
Accordingly, the mark up for Long Term Financing Facility will be 10.0% p.a. with effect from July 08, 2022 till further instructions.
MPC decided that the interest rates on EFS and LTFF loans are now being linked to the policy rate to strengthen monetary policy transmission, while continuing to incentivize exports by presently offering a discount of 500 basis points relative to the policy rate.
This action combined with increase in policy rate by 125 basis points continues the monetary tightening underway since last September, which is aimed at ensuring a soft landing of the economy amid an exceptionally challenging and uncertain global environment. It should help cool economic activity, prevent a de-anchoring of inflation expectations and provide support to the Rupee in the wake of multi-year high inflation and record imports.
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