ICCI hails government for 25 basis point cut in the benchmark interest rate

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ISLAMABAD, May 23 (APP): Businessmen in a meeting at
Islamabad Chamber of Commerce and Industry here on Monday hailed the 25 basis point cut in the benchmark interest rate bringing it down from 6% to 5.75% 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.

Addressing the meeting, Atif Ikram Sheikh, President,
Islamabad Chamber of Commerce and Industry hoped that cut in 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 despite grant of GSP Plus status by EU to Pakistan the textile exports had 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.

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.

The businessmen were of the view that the industry was
accounting for nine percent to GDP and more than 60 percent to exports, however, it was facing liquidity crunch on account of delay in export refunds of about Rs 50 billion by the FBR due to which the exporters were losing competitiveness in the international market.
They urged that FBR should ensure timely clearance of
refund claims to facilitate the exporters that would help them
in overcoming liquidity issues and reviving exports of the
country.