KARACHI: Data released by the State Bank of Pakistan (SBP) revealed the country’s private sector lending touched a record high of Rs4.893 trillion in February 2018, registering an almost 18 percent rise year-on-year.

This was attributed to lower interest rates which reduced the borrowing costs and aggregate private sector loans were recorded at Rs4.13 trillion, reported The News.

The central bank data showed bank advances to corporate borrowers and consumers had registered a 18.47 percent increase on a year-on-year basis in February 2018, which is the highest pace of growth since June 2006.

According to analysts, the era of low interest rates is about to end, and it would impact credit demand growth and increasing consumer spending.

Manufacturing sector advances rose to Rs2.505 trillion in February 2018 compared to Rs2.122 trillion in same period last year (SPLY).

The large-scale manufacturing sector registered growth of 6.33 percent during July-January FY 2018 compared against corresponding period of last financial year.

Also, private sector loans to textile sector also showed an increase, with banks doling out Rs818.582 billion in loans to textile companies in February 2018 compared against Rs697.131 billion a year ago.

Increase in textile sector advances was driven by increase in exports to North America and Europe, said SBP.

Recently, the government has provided an incentive package for the textile sector which would further boost textile exports.

A rise in consumer financing was also recorded during February 2018, touching Rs437.3 billion during February 2018 compared to Rs361 billion in SPLY and this increase was driven by an escalation in consumer durable and auto loans.