Auto financing falls for eighth month in row

The outstanding auto financing continued to decline for the eighth consecutive month in February dipping almost 9 per cent to Rs326 billion from Rs357bn in the same month last year, data released by the State Bank of Pakistan (SBP) showed on Tuesday. Samiullah Tariq, head of Research Pak Kuwait Investment Company, said 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. Car assemblers have continued to keep production activities suspended due to parts shortages after the central bank’s decision of putting curbs on imported parts and accessories in a bid to slow down the demand for vehicles. The interest rate stands at 20pc which was 7pc in March 2020. 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.