LAHORE - Representatives of different chambers of commerce and industrial associations have expressed satisfaction over the constant downward change in the policy rate by the central bank.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI), SAARC Chamber of Commerce & Industry, Lahore Chamber of Commerce and Industry, All Pakistan Business Forum and All Pakistan Textile Mills Association said that drop in policy rate would provide boost to grappling economy to large extent and result into better prospects for investment climate besides providing financial relief to industrialists especially exporters.

FPCCI President Mian Adrees said downward revision in policy rate would create liquidity for the industry, which was already braving high cost of energy and production besides other crisis. He said that policy rate cut would provide help to the exporters in terms of competitive international market besides it would grow productivity level.

LCCI President Ijaz A. Mumtaz said that the Governor State Bank deserves appreciation for bringing down the interest rate to seven percent. He called for measures to make interest rate cut meaningful and result oriented as if the other economic factor were not taken, they would continue to create problems for the economy in general and for the private sector in particular.

APTMA chairman SM Tanveer said that in past, higher rate has not helped the government to reduce imports of oil, food, raw material and essentials; on the other hand it reduced growth and savings, triggered unemployment and made imports costly. He said policy rate cut would help to control unemployment and support expansion plans.

He said private sector’s bank borrowing would get momentum and banks would prefer lending, as the private sector would have to pay lower interest on its borrowings.

SAARC Chamber of Commerce & Industry vice president Iftikhar Malik said that India, Bangladesh and Sri Lanka are the major competitors of the country in the international market. The mechanism to control inflation through this measure would also work, as the government being the major borrower of the commercial banks would resist borrowing money. He said that availability of surplus liquidity in the market is always essential and prime factor behind investment in the industry, he added.

Iftikhar Malik said that reduction in bank mark-up rate would encourage fresh investment in the industry, resulting into increase in jobs and exports of the country.

“The SBP’s downward change in the policy rate would help keep the cost of living, the cost of doing business, and rate of defaults and unemployment within control limits. Private sector would become able to attract and raise fresh funds,” said the SAARC Chamber VP.

LCCI former vice president Kashif Anwar said that the current decision shows the SBP is moving in the right direction and thinks for the growth of industrial sector. The step will help to keep control the inflation, he said. The textile, leather and other exporting sectors of the country have great potential to attract foreign investment.

Kashif, while expressing pleasure over SBP’s step, said that industry was facing 49 percent hike in power tariffs, 35 percent for commercial and 13 percent for domestic consumers. He said policy rate cut would help returning the banks’ loans, which would decrease the ratio of non-performing loans (NPLs).