PESHAWAR: Khyber Pakhtunkhwa Textile Mills Association (KPTMA) has hailed 200 basis points cut in the policy rate by the State Bank of Pakistan’s (SBP) bringing it down to 17.5 per cent, and stressed measures to boost competitiveness and economic growth in the country.

In a statement here on Friday the association chairman Salim Saifullah Khan welcomed the decision as a positive step towards supporting the country’s struggling industrial sector and stressed for further aggressive measures to boost competitiveness in the business and industrial sectors.

Mr. Khan asked for more aggressive reduction in the interest rate to immediately bring it down to 12 per cent to provide relief to industries. He stressed for striving to achieve ultimate goal of settling it down over the time at 6 to 7 per cent in line with the regional economies.

He said that they (industrialists) appreciated the downward trend in interest rates, but the cost of borrowing remained unsustainably high, especially for industries such as textiles in Khyber Pakhtunkhwa. He also highlighted the stability of the Pakistani rupee, which had contributed to ease inflation by reducing the cost of imported goods.

“Currency stability has a direct impact on inflation, and with the rupee stabilising, we are seeing easing down of the inflation rate. However, interest rates must be lowered to at least 12 per cent to provide immediate relief to industries,” Mr Khan stressed.

However, Salim Saifullah Khan, a former senator, expressed concern over Pakistan’s balance of payments, noting that the outflows of US dollars continued to exceed inflows, creating recurring financial challenges.

He said that boosting exports was the only sustainable solution to the country’s economic woes. He said that the prime minister had set an ambitious target of $60 billion in exports over the next three years, with the textile sector contributing share of $33 billion.

Published in Dawn, September 14th, 2024