KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has praised the central bank for reducing policy rate by two percent to nine percent from 11 percent.
In a statement issued on Friday, Mian Anjum Nisar, President, FPCCI appreciated reduction in the policy rates by 2 percent from 11 percent to 9 percent by State Bank of Pakistan (SBP) in view of the current situation and banks should follow SBP immediately accordingly.
The reduction in policy rate by 4.25 percent in a month is commendable step of the government in the present situation that will positively affect cost of doing business and will encourage Investors and Industrialists to make new investment in the country.
The president FPCCI also said that the pandemic COVID-19 has affected the global economy and pushed to the depression resulting contraction in the economic activities and a threat to unemployment.
He told that the expected long-terms affects are more severe than the previous great depression losses.
He apprehended that the economy of Pakistan will contract by 1.5 percent due to COVID-19 in the current fiscal year and the government has to take immediate measures to protect the trade and industry that will ensure future employment, economic growth and socio-economic prosperity.
Present available resources must be utilized to safeguard the trade and industry so that our industry could be able to compete with global world after this crisis.
The whole economy is in lock down situation since last 26 days, and will continue for 3 months which is building liquidity crunch and our policies should address post CORONA situation so that business can run and jobs can be secured.
He also said that affected countries have considerably reduced interest rates and Pakistan’s trade and industry is also in a dire need to further reduction in the interest rate to nearly 5 percent so it could be sustain under the prevailing conditions.
He further stated that foreign exchange reserves are increasing due to assistance from IMF, World Bank, Asian Development Bank and other friendly countries so SBP also control and manage the market more effectively particularly the exchange rates.
FPCCI chief emphasized that the SBP Scheme of loans to industry for salaries payment of employees should be interest free and the government should also contribute in it as it will be a liability to payback with interest for the period when industry is closed and workers are at homes.
The scheme needs to be revisited with the consultation of the stakeholders who are facing multidimensional problems and are able to guide the policy maker under this terrible situation.