FAISALABAD               -         Governor State Bank of Pakistan (SBP) Dr Reza Baqir on Thursday said that economic indicators have become positive, and with mobilisation of national resources more relief will be provided to the private sector in future.

Addressing the business community at Faisalabad Chamber of Commerce and Industry (FCCI) here, he recounted various steps taken for transforming the economic deficit into surplus and added that during the first six months, the exchange rate had been switched from fixed to the market driven rate. He said that imports had been reduced while exports had recorded a modest increase and the SBP was optimistic that with the confidence of private sector more facilities would be given to the sector.

He compared Pakistan with Egypt and said that in Egypt exchange rate was increased 125 per cent within only 24 hours, but in Pakistan only 55 per cent increase was recorded during 18 months.

Regarding the interest rate, he said that in case of Egypt it jumped to 18-19 per cent while in Pakistan interest rate was still 13.25 per cent. Regarding inflation, he said that it is 30-35 per cent in Egypt while it is only 12 per cent in Pakistan despite criticism by some elements in the country. He said that the macro level index was positive and now his focus was on controlling inflation.

He was optimistic that within the next few months, inflation would start decreasing. Comparing savings with inflation rate, he said that people prefer to invest their savings in the real estate.

However, he was making efforts to bring these investments through banking channels. He disclosed that 20-30 per cent more revenue had been collected and as the situation would ease, more facilities would be announced for exporters. Governor SBP Dr Reza Baqir said that there were only few countries including Sudan, Ethiopia, Yemen and Afghanistan whose export-to-GDP ratio was less than 10 per cent. He said that our export had huge potential.

He announced various schemes for export sector including long-term finance, which is offering only three per cent interest rate for exporters. He said that the SBP intended to diversify exports which henceforth remained textile-centric.

He said that the SBP would encourage savings so that the account holders could get better interest rates over their savings. As the economic situation would improve, the ban on imports would be gradually lifted, he assured. He also announced more facilities for the export sector in a phased manner as he did not want to shake people's confidence. He said that the Banking Services Corporation had framed different focus groups including micro and agriculture. It has also arranged many sittings with the FCCI.

He also mentioned various schemes for women entrepreneurs and said that for the scheme, the SBP would provide capital at zero per cent interest to commercial banks who are allowed to receive only 5 per cent for a period of 10 years.

He said that in these cases, the SBP also bear 60 per cent risk of loaning. He pointed out that only due to lack of information, women are unable to avail the facility. Earlier, forms for loan applications consisting of 7-8 pages, which have now been reduced to only one-and-a-half page, were unveiled. In this case, documentation is also being standardized which is expected to be launched in February next year, he added.

Responding to various questions, Dr Baqir said that the LTF had Rs 25 billion cushion. Similarly, for the EFF schemes, Rs 25 billion cushion was also available till Dec 31. However, the SBP would further increase the limit for the remaining fiscal year. He said that knowledge management system would be launched in the next month. It will be an online facility and applicants could know the status of their loan applications by entering their transaction code.

Earlier, Rana Sikandar-e-Azam, president FCCI, in his address of welcome, introduced Faisalabad and FCCI. He recounted the financial achievements of the government during the last five months and told that rupee had appreciated against dollar.

Similarly, our imports were reduced to $19.2 billion while exports remained $9.9 billion. "If we include remittances of $9 billion during this period, our deficit will remain only 0.6 per cent." Rana Sikandar-e-Azam demanded that the SBP must take solid measures to provide cheap loans to industrial sector. Later, Mian Javed Iqbal, former president FCCI, along with Rana Sikandar-e-Azam, presented a shield to Governor SBP Dr Reza Baqir.