Pakistan approves phasing out of long-term financing to Exim Bank

KARACHI: The Economic Coordination Committee (ECC) of Pakistan’s federal cabinet has approved the phasing out of long-term financing to the country’s Export-Import Bank of Pakistan, or Exim Bank, the Finance Division said on Friday.
The statement came after Finance Minister Muhammad Aurangzeb presided over a meeting of the ECC to review proposals and summaries with regard to various departments and ministries.
Among other agenda items, the forum discussed a summary presented by the Finance Division regarding the phasing out of the State Bank of Pakistan’s long-term financing facility (LTFF) to Exim Bank.
“The ECC decided that the SBP’s LTFF portfolio of PKR 330 billion would be phased out to the Exim Bank, with an allocation of PKR 1.001 billion through a Technical Supplementary Grant to meet the LTFF subsidy requirement for the new portfolio for FY 2025,” the Finance Division said.
EXIM Bank of Pakistan’s mandate is to catalyze the growth and diversification of the country’s exports and to support the implementation of import-substitution projects. It provides a level playing field to Pakistani exporters to compete with international exporters who already rely on their national Export Credit Agencies or EXIM Banks.
EXIM Bank of Pakistan meets its requirements by providing credit, insurance and lending products, designed to enhance the overall credit risk appetite in Pakistan. It also supports the implementation of manufacturing facilities and infrastructure projects in Pakistan to facilitate import substitution, saving the drain of valuable foreign exchange from Pakistan.
Pakistan’s Prime Minister Shehbaz Sharif has repeatedly said his government is prioritizing exports to ensure sustainable economic growth for the country’s fragile $350 billion economy. Sharif has recently said his government aims to increase Pakistan’s exports to $60 billion in five years.
The South Asian country is trying to stabilize its economy through sustainable reforms agreed with the International Monetary Fund (IMF) in exchange for a financial bailout program.