IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Outflow (subsidised)

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 26 Jun 2009 | Removal date: open ended
Still in force

Trade finance

 On 26 June 2009, the State Bank of Pakistan amended the Long Term Financing Facility (LTFF), a scheme that provides refinancing for imported and locally manufactured plant and machinery used for certain export oriented projects. The amendment included the following :
 

  1. LTFF was extended for financing ofLetter of Credits for purchase of machinery that were contracted before the scheme was announced in 2007 and retired after 30 June 2007, provided the letters have not been retired by the sponsors of the projects.
  2. Also, LTFF was extended for plant and machinery used for production exportable products out of textile waste. Refinancing for these facilities will be provided at 50% of the financing by the State Bank of Pakistan provided as opposed to 100% for other plant and machinery.

 
On 14 September 2009, the SBP relaxed the first amendment and allowed Letter of Credits (LCs) for purchase of machinery contracted before 2007 and retired after 30 June 2007 to be refinanced under the LTFF even though they were retired through the sponsors' own sources. This relaxation is valid until 31 December 2009.
 
The GTA includes state guarantees and other financial incentives that are likely to affect the restructuring and performance of firms facing international competition, whether from imports, in export markets, and from foreign subsidiaries

AFFECTED COUNTRIES

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