BUSINESSMEN URGE SBP TO SLASH INTEREST RATE TO 5PC

ISLAMABAD/LAHORE -Business and industrial community here on Saturday hailed the initiative of the State Bank of Pakistan to reduce policy rate by 2 percent and urged the government to further slash it down to 5 percent.

They also urged the government to announce another incentives package for the revival of small and medium sized industry.

In press statement, SAARC Chamber of Commerce and Industry (CCI) President designate Iftikhar Ali Malik urged the State Bank Pakistan to further cut policy rate for easy access to finance for the local industry and exporters who were confronting new challenges and uncertain conditions.He also urged the need of deferment of payment of utility bills and waiver of surcharges for at least next three years, restoration of zero-rated sales tax regime and exemption from welfare fund contributions.

He said that the government’s resolve to contain the spread of virus was commendable and foreign industries were now considering relocating to Pakistan due to it. On behalf of the manufacturers, he said that incentives such as the cut in import duty on the required raw materials must continue unabated as it would ensure an economic stimulus.Iftikhar Malik opined that a lowering of interest rate at 5 percent together with cheaper oil import shall raise future expectations of investors and serve as vantage point for Pakistan in steadily conquering the budding trade gap in GSP Plus backed markets of Europe. “Moreover, it would also make business climate more lucrative for foreign investment in the ongoing pandemic,” he added.

He said that presently effective power houses like USA, UK, China, South Korea and Japan who controlled 65 percent of the manufacturing industry of the world were being in trouble whereas Pakistan still can meet the challenge and can grow its economy.

He also urged the State Bank to draft a separate policy for micro and small enterprises to enable them to keep their workforce, survive in current critical conditions and sustain in the long term.

Micro, small and medium-sized businesses accounted for roughly 70% of Pakistan’s economy and provided employment to more than 10 million people, he highlighted. Iftikhar Malik feared that the economic impact of Covid-19 would lead to the closure of many businesses as they were suffering from lockdowns and generating no income.

Meanwhile, Pakistan Hosiery Manufacturers & Exporters Association has welcomed the central bank’s hefty cut of 2 percent in its key interest rate, bringing it down to 9 percent, besides appreciating the Ministry of Commerce proposal to exempt duties and taxes on exports proceeds to cope with the fallout from Covid-19 on exports.

Meanwhile, Pakistan Industrial & Traders Associations Front has also appreciated the State Bank of Pakistan’s decision of lowering the discount rate by 200 basis points, bringing it to 9 percent, which will spur the economic activities, slowed down amidst coronavirus.Javed Iqbal said that now SBP’s large cut in interest rate will revitalize the country’s economic growth. He said that Pakistan has no employment generation, as industries are being closed down and non-performing loans are rising, posing a threat to industrial growth.

The Nation, 19 Apr, 2020