Refinance rate cut to 4.5%, industrial power tariffs lowered

January 30, 2026 (MLN): Prime Minister Shahbaz Sharif on Thursday announced a reduction in the refinance rate by 300 basis points, bringing it down to 4.5% from 7.5%, as part of measures aimed at supporting economic activity and easing financing costs.

In a separate announcement, the Prime Minister also unveiled a cut in electricity wheeling charges by Rs4.04 per unit. Following the reduction, wheeling charges now stand at Rs8.51 per unit, compared with the previous rate of Rs12.55.

Additionally, industries will benefit from a Rs4.04/kWh reduction in power tariff and a Rs9.0/kWh reduction in wheeling charges, further lowering power transmission costs and supporting competitiveness amid ongoing efforts to stabilize the economy.

The financing rate for the Export Refinance Scheme has also been revised, now set at Policy Rate (10.5%) -6%, down from the previous Policy Rate -3%, providing additional support to exporters and promoting investment activity.

The reduction in wheeling charges is expected to lower power transmission costs for businesses, particularly industrial and commercial consumers, and support competitiveness amid ongoing efforts to stabilize the economy.

Prime Minister Muhammad Shahbaz Sharif attended a ceremony held in honour of the country’s leading exporters and business figures today. 

On the occasion, the Prime Minister presented awards to exporters in recognition of their outstanding contribution to the national economy, further awarding them a blue passport as well.

Welcoming the move, Musadaq Zulqarnain, Chairman of Interloop Limited, termed the initiative “thoughtful and timely,” noting that the reduction in ERF rates has been achieved without any fiscal cost.

In a statement on his X platform, he said the move was made possible through a prudent 1% cut in the Cash Reserve Requirement (CRR), which has released over Rs300 billion in liquidity into the banking system. He added that this liquidity enables banks to absorb the 300 basis points reduction in ERF rates, strengthening market liquidity while preserving financial sector profitability.

Market participants are closely watching the potential impact of these measures on investment activity, energy costs, and broader macroeconomic conditions.

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