ISLAMABAD/SIALKOT-The business community at Islamabad Chamber of Commerce and Industry (ICCI), reacting to the 1 percent slash in policy interest rate by the SBP, has demanded of the government to make further cut in interest rate and bring it down to 5 percent as in the prevailing circumstances, a low policy interest rate was the key requirement for reviving the business activities and turning around the downward slide of economy.

Muhammad Ahmed Waheed, president of Islamabad Chamber of Commerce and Industry, said that at a time when business and industry were struggling for survival due to Covid-19 pandemic, high interest rate in Pakistan was a major hurdle in new investment and expansion of existing businesses.

He said that to combat the challenges of Covid-19 pandemic, many countries have made drastic cut in policy interest rates in order to mitigate the woes of businesses. He said that policy interest rate in Malaysia and Indonesia was currently 4.50 percent, India 4.40 percent, China 3.85 percent, South Korea and Thailand 0.75 percent, Japan -0.10 percent and USA & Euro Zone zero percent, but interest rate in Pakistan was still on higher side that should be reduced to minimum 5 percent. It would alleviate the difficulties of business sector and help in revival of economic activity.

ICCI President said that due to Covid-19 pandemic, businesses and industrial units in Pakistan have suffered huge losses and were on the verge of collapse.

He said this situation has made it very difficult for business community to pay back loans taken from banks with mark up. He said that government has taken a wise decision by providing relief in payment of electricity bills to small businesses.

He emphasized that SBP should also hold a dialogue with commercial banks to convince them to defer receipt of loans with mark up from business community for at least 6 months so that businessmen could revive business activities and be able to pay back the outstanding loans of banks with mark up.

Meanwhile, the Sialkot Chamber of Commerce and Industry (SCCI) has welcomed one per cent cut in interest rate by the State Bank of Pakistan (SBP).

In a press release issued here on Saturday, SCCI President Muhammad Ashraf Malik said that with the announcement, the interest rate has lowered from 9 to 8 per cent. He termed it a relief by the SBP for the export sector in the prevailing crisis.

The SCCI president said that the exports sector was already facing crisis due to the ongoing lockdown situation, as a number of their export orders had already been canceled by the foreign buyers.

He also stressed that the industries which were allowed to operate under the standard operating procedures (SOPs) by the government would not be able to sustain any further due to supply chain issues, and they face the threat of losing their exports orders eventually.

He urged that the federal government should allow vendors to open so that the supply chain of the export industry could manage to sustain their ongoing orders and may also contribute to betterment of crisis-stuck economy of the country.