Busi­ness com­mu­nity hails 25 ba­sis point cut in pol­icy rate

Pakistan Observer - - ECONOMY WATCH - IS­LAM­ABAD—The

busi­ness com­mu­nity has hailed the 25 ba­sis point cut in the bench­mark in­ter­est rate bring­ing it down from 6 per­cent to 5.75 per­cent and termed it a pos­i­tive move as it would be in­stru­men­tal in re­duc­ing cost of credit for pri­vate sec­tor and spurring eco­nomic ac­tiv­i­ties in the coun­try. The Pres­i­dent of Is­lam­abad Cham­ber of Com­merce and In­dus­try, Atif Ikram Sheikh ad­dress­ing a meet­ing at Is­lam­abad Cham­ber of Com­merce and In­dus­try, Mon­day, said the coun­try has al­ready missed the eco­nomic growth tar­gets for the cur­rent fi­nan­cial year by a wide mar­gin.

He hoped that cut it pol­icy rate to over 40-year low would sup­port the econ­omy to per­form bet­ter. He said the low pol­icy rate has a direct im­pact on in­dus­trial growth as it re­duces the cost of pro­duc­tion and pro­vides credit to pri­vate sec­tor at af­ford­able cost. There­fore, this move should help pri­vate sec­tor in re­viv­ing the econ­omy. Atif Ikram Sheikh said that our tex­tile ex­ports have de­clined by 7.68 per­cent com­ing down to $10.395 bil­lion dur­ing the first 10 months of the cur­rent year (July-April) as com­pared to $ 11.26 bil­lion dur­ing the same pe­riod of last fis­cal year. This has hap­pened de­spite the grant of GSP Plus sta­tus to Pak­istan by the EU, which should be a cause of con­cern for the pol­icy mak­ers.

How­ever, he was op­ti­mistic that his­toric cut in bench­mark in­ter­est rate would help the in­dus­trial sec­tor to avail low cost credit for upgra­da­tion of tech­nol­ogy and ma­chin­ery as one of the ma­jor rea­sons of fall in ex­ports was that the lo­cal in­dus­try failed to in­vest in mod­ern­iza­tion and di­ver­si­fi­ca­tion to ex­plore new ex­ports av­enues.—Agen­cies

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