KARACHI: Amid a downward trajectory in the interest rates, auto financing declined for the 26th consecutive month to Rs227.3 billion in August from Rs228bn in July.

As per the State Bank of Pakistan (SBP) data, the outstanding auto loan registered a massive fall of Rs140.7bn from Rs368bn in June 2022.

The State Bank of Pakistan (SBP) reduced the interest rate for the first time in nearly three years to 20.5 per cent on June 10 from an unprecedented 22pc. This was followed by a further reduction to 19.5pc on July 29 and then to 17.5pc on Sept 12, thus bringing a ray of hope for the revival of auto sales.

Amid falling interest rates, private banks have also offered lucrative deals to new buyers. A few seem to have achieved some success, as the drop in auto financing volume in August wasn’t so alarming compared to previous months.

Topline Securities Chief Executive Mohammed Sohail said car and bike sales were surging. Moreover, banks have started extending financing at slightly lower mark-up rates. “We see some improvement in auto loans going forward,” he added.

Published in Dawn, September 19th, 2024