Karachi, February 12, 2026 – Commercial banks in Pakistan have voluntarily reduced the Export Refinance Facility (ERF) rate to 4.5%, a move warmly welcomed by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).
In a statement on Thursday, FPCCI President Atif Ikram Sheikh described the reduction as a timely lifeline for the country’s export-oriented industries. He emphasized that the move directly addresses the FPCCI’s long-standing demand to rationalize the cost of capital and reduce the overall cost of doing business.
“This 300 basis point cut is more than a monetary adjustment; it is a strategic boost to competitiveness in Pakistan’s manufacturing and export sector,” Sheikh said. “With the new ERF rate of 4.5%, Pakistani exporters are better positioned to compete with regional peers such as Bangladesh and Vietnam, who benefit from low financing costs.”
The ERF facility remains subject to the existing limit of Rs1,052 billion, which is flexible and may be expanded by the State Bank of Pakistan (SBP) or the Export-Import Bank of Pakistan (EXIM Bank) through June 2027. Sheikh noted that this adjustment comes at a crucial juncture when the private sector is striving to support the government’s vision of robust economic recovery and export growth.
Highlighting a 57% surge in the SME borrower base last fiscal year, Sheikh said the 4.5% ERF rate will sustain momentum for small exporters, who are most vulnerable to high financing costs. He predicted that the reduction could push year-on-year export growth into positive territory, provided continued institutional support.
FPCCI reaffirmed its commitment to collaborating with the government to achieve national export targets, emphasizing that the reduced ERF rate is a cornerstone for economic stability and export-led growth in 2026 and beyond.