##gour. fourth, companies which met their demand from external borrowings are likely to revert to domestic markets given the widening of spreads overseas. finally, banks are now provisioning for loan losses which remain manageable. with these developments private sector credit is expected to gain momentum. growing liquidity and competition forced banks to lend close to and in some instances below kibor and overall there was softening of lending rates. resultantly, the benchmark kibor has also shown rationalization and 6 - month kibor has registered a decrease of 61bp on a y - o - y basis and is currently around 10. 0 %, despite the increase in discount rate by 50bp. banks have also been responsive on deposit side to the central bank calls. in november, pakistan banking association announced a consensus view of the industry to raise deposit rates for saving accounts to minimum of 4 % and also prior to that there have been series of announcement of new products for investors holding certain balances with commercial banks. these measures along with the zero crr for long dated deposits and moral suasion of central banks has resulted in growth in share of time deposits and rise in weighted deposit rates by 181 bps on fresh deposits / 157 bps on outstanding deposits, relative to december 2005. sbp has further been facilitating both the export and long term refinancing. the outstanding funds provided by the state bank and banks to exporters at 7. 5 % reached rs132 billion as on 3 - 11 - 2007 – which is higher than last year ’ s trends. sbp has honoured applications for around rs 6. 8 billion ltfeop contracted prior to july 2007. at the same time, it announced the implementation of 3 % interest rate subsidy for spinning sector and continued to pay r & d support expeditiously which has now reached rs25 billion on a cumulative basis since its introduction and sbp disposed off almost 270, 000 cases of it. the scheme for long term financing facility will be operationalized in january 2008 as soon as the details of its workings have been well understood by the commercial banks. this is a broad based facility which will make available long term credit for fabric, garments, made up, towels, rice processing, leather & leather garments, sports goods, carpet & wool, surgical instruments in the core categories, and fisheries, poultry & meat, engineering goods etc in the developmental categories of industrial sectors and is expected to finance both domestic and imported plant and machinery equipment for

all exporters reporting exports of rs 300 million annually or fifty percent of their production capacity whichever is lower. in order to facilitate matters banks are now allowed to make advance payments upto 100 % of fob or cfr value of goods against firm registered contracts and lcs. exporters are allowed issuance of bill of lading on document acceptance and document payment basis and also can retain 10 % of export proceeds in the foreign currency accounts. in conclusion, our economic assessment and support for industry should help provide for clear direction of economic trends and expectation, while positioning industry to plan its futuristic investment in accordance with market incentives.