Business community hails 25 basis point cut in policy rate
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