KARACHI: Industry leaders are not happy over the cut in interest rate announced by the State Bank as they believe it should have been brought to single digits.

They also sought various reliefs and incentives from the federal government to combat the negative impact of coronavirus pandemic on exports and local production.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Mian Anjum Nisar said the SBP’s decision of interest rate cut seems totally against the global wisdom under prevailing drastic conditions as COVID-19 rages on.

Global think tanks and a large number of countries are supporting economic activities by introducing ease of doing business and market expansion policies, while the SBP is ignoring the current devastating conditions around the world that would affect Pakistan’s exports.

Majority of leading economists were expecting a policy rate cut of about 300 bps to spur economic activities, he said.

Nisar added that there are strong reasons for lowering interest rates to single digits as oil prices are continuously declining and inflation is also going down. Significant cut in the interest rate is necessary as per demand of the current global situation as well as to protect local trade and industry.

The FPCCI chief apprehended decline in Pakistan’s foreign trade as Europe, America and other countries are facing severe conditions where textile and other goods export are under threat due to corona virus.

The federal government and the central bank should also adopt measures to support business activities. The German government is considering an emergency fund aimed at helping small- and medium-sized companies, he said.

The government should also seek a moratorium and negotiate with international donor agencies to financially support the country’s limited resources. The government should also consider reducing cost of doing business through availability of all kinds of industrial input at reduced prices, he said.

President North Karachi Association of Trade and Industry (NKATI), Naseem Akhtar said the coronavirus bomb is destroying industrial and export activities while K-Electric is creating problems for industries. “After withdrawing subsidised tariff under industrial support programme, KE has sent three year supplementary bills to industries,” he said.

Published in Dawn, March 19th, 2020