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Pak business community hails rate cut
15
Sep '15
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and the Karachi Chamber of Commerce and Industry (KCCI) have welcomed the State Bank of Pakistan’s latest rate cut, saying the decision would benefit the country’s export oriented sectors and industrial units, according to media reports.

The SBP cut the policy rate by 50 bps to 6 per cent for the next two months.

The improvement in macroeconomic indicators, the fall in oil and commodity prices and relatively low inflation led SBP to continue with its accommodative monetary policy stance and slash the policy rate.

Members of the business community described the rate cut as an elixir for the sluggish economy and hoped it would bring better prospects for the investment climate besides providing financial relief to the industrialists.

Representatives of almost all the chambers of commerce and industry in the country besides industrial and trade associations, including the All Pakistan Textile Mills Association (APTMA), Pakistan Tanners Association (PTA), Pakistan Cotton Ginners Association (PCGA), Surgical Instruments Manufacturing Association Pakistan (SIMAP), and All Pakistan Marble Mining Processing Industry and Exporters Association (APMMPIEA), said the downward revision in the policy rate would provide more liquidity prospects to the industry, which was already braving high cost of energy and production.

PTA senior member Agha Saiddain said the textile, surgical, marble, sport goods and other major exporters in the competitive international market would get relief on banks’ loans besides lowering the cost of doing business to some extent.

The country’s industry needs to get better productivity and bank loans on lower interest rates would provide the industry and exporters to borrow money on lower rates, he added. He said India, Bangladesh, China, Sri Lanka and Thailand remained the leading competitors for Pakistan, so it is vital for Pakistan to produce exporting products on competitive costs. Surplus liquidity in the market is always important and one of the prime reasons behind investment in the industrial sector, he added.

He said the reduced bank mark-up rate would encourage fresh investment in the industry, particularly in leading exporting textile and leather industry besides increasing jobs and exports of the country.

“SBP’s policy will help keep the cost of living, cost of doing business and rate of defaults and unemployment within control. The private sector would be encouraged to raise fresh funds by seeking loans from the banks. The rate cut will also help reduce oil, food and industrial raw material bills,” said Karachi Cotton Association’s senior member Ghulam Rabbani.

The KCCI members said different segments of the society were expecting downward revision up to 2 per cent. However, they added that half percent bps cut would also benefit the industry and trade. (SH)

Fibre2Fashion News Desk – India

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