Mr. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce & Industry (FPCCI), has warmly welcomed the banking sector’s voluntary decision to reduce the Export Refinance Facility (ERF) rate by 3%, bringing the end-user cost down to a competitive 4.50% – while reiterating FPCCI’s stance that export-led economic growth is the only viable, sustainable and pragmatic way forward for the country.

Mr Atif Ikram Sheikh, President FPCCI, termed the move a timely lifeline for the country’s export-oriented industries, stating that the reduction effectively addresses the FPCCI’s long-standing demand to rationalise the cost of capital and reduce the cost of doing business.

Mr Atif Ikram Sheikh elaborated that the initiative is currently subject to the existing ERF limit of Rs. 1,052 billion – though this limit is inherently designed to be flexible- and may be raised when the State Bank of Pakistan (SBP) or Export-Import Bank of Pakistan (EXIM Bank) increase the limit through June 2027.

Mr. Atif Ikram Sheikh explained that this 300 basis point reduction is not just a monetary adjustment; it is a direct injection of competitiveness into our manufacturing and export sector. With the new ERF rate of 4.50%, Pakistani exporters are now better positioned to compete with regional rivals such as Bangladesh and Vietnam, which have historically enjoyed single-digit financing costs.

The FPCCI President highlighted that the relief comes at a crucial juncture, when the private sector is passionately supporting the government’s vision of a robust economic recovery and export growth. He predicted this rate cut would accelerate industrial borrowing.

FPCCI Chief pointed to the 57% surge in the SME borrower base over the last fiscal year, emphasising that a 4.5% ERF rate will sustain this momentum for small exporters who are most vulnerable to high financing costs.

Mr Atif Ikram Sheikh apprised that FPCCI forecasts that this cost reduction could push year-on-year export growth into the positive territory if the government and its institutions continue to extend support to exporters, while appreciating the State Bank of Pakistan (SBP) for facilitating exporters’ access to finance.

The FPCCI reiterated its commitment to working with the government to achieve the national export target, confident that the reduced ERF rates will serve as a cornerstone of economic stability in 2026 and beyond.