KARACHI: The State Bank of Pakistan (SBP) has no plans to lift the Rs3 million cap on auto loans, even though the macroeconomic indicators have shown improvement.
Officials from the central bank said at an analyst briefing after the interest rate decision on Monday that there are currently no immediate plans to remove this cap, as the auto sector is already experiencing strong growth. However, they mentioned that the situation could be reassessed in the future.
The SBP on Monday lowered its benchmark interest rate by 100 basis points (bps) to 11 per cent, marking the continuation of a series of rate cuts that reduced the rate from a record high of 22 per cent after a brief hold in March.
In terms of sales, overall auto sales -- comprising cars, light commercial vehicles (LCVs), pickups, and jeeps -- totalled 11,098 units in March, showing an 18 per cent increase year-on-year (YoY). However, there was an 8 percent decrease month-on-month (MoM).
YoY growth can be attributed to a more stable macroeconomic environment, lower interest rates, easing inflation and improving consumer sentiment.The introduction of new models and variants has also stimulated demand, pushing sales for the first nine months of fiscal year 2025 to 100,868 units. This represents a significant 46 per cent increase from the 69,081 units sold in the same period last year.