KARACHI, Mar 22 (EW): The outstanding auto financing in the country continued to decline for the eighth consecutive month in February 2023, dropping almost nine per cent.
Data released by the State Bank of Pakistan (SBP) shows that the auto financing fell to Rs326 billion in February 2023 from Rs357bn in the same month of 2022.
According to Samiullah Tariq, who is head of Research Pak Kuwait Investment Company, car financing would remain depressed in coming months due to a massive rise in monthly instalments on account of soaring interest rates and surging vehicle prices and delay in delivery due to plant shutdowns.
He said banks are offering loans at four to 5pc higher than the Karachi Interbank Offered Rate (Kibor), making it difficult for the buyers to afford higher monthly instalments amid unprecedented inflation. The interest rate stands at 20pc which was 7pc in March 2020.
Leading car assemblers have already either shut plants or reduced production owing to shortages of parts after the central bank’s decision of putting curbs on imported parts and accessories in a bid to slow down the demand for vehicles.
