Rate hike to raise working-capital costs: PTEA

Pakistan’s textile exporters say the State Bank’s 50-basis-point increase in the policy rate to 12.0 per cent will make it more expensive to finance day-to-day operations. Business Recorder reported that Pakistan Textile Exporters Association Chairman Rehan Naseem Bharara warned the higher rate could limit investment and make competing internationally harder for exporters already facing costly energy and other inputs.

Bharara compared Pakistani borrowing costs with rates cited for industrial and small-business loans in India, Vietnam and China, which he said were lower. PTEA Vice Chairman Haris Yousaf added that exporters faced shipping costs nearly 200 per cent higher, while increased financing expenses could further pressure working capital, raw-material purchases and operating budgets. PTEA called for an export-focused policy framework and easier finance for small and medium-sized enterprises.