Monetary Policy: Interest rate cut not enough, say exporters

Bringing discount rate down to single digits would prove more beneficial for promotion of trade and industry.

FAISALABAD:

Textile exporters, while welcoming a 150-basis-point reduction in interest rate, have said the move is not enough to put the trade and industry back on track as the interest rate is still very high and should be brought down to single digit.

They were responding to the cut in discount rate to 10.5% in the monetary policy, announced by the State Bank of Pakistan on Friday. They termed the decision a realistic support to the textile industry and a step in the right direction.

Talking to the media here on Saturday, Pakistan Textile Exporters Association Chairman Rana Arif Tauseef pointed out that bringing the discount rate down to single digits would prove more beneficial for the promotion of trade and industry.

“This will help encourage long-term investment and with zero load-shedding it will accelerate economic activities,” he said.

The cut in discount rate was a longstanding demand of the textile exporters as their production had been badly affected by various factors, including the high interest rate.

Tauseef said high mark-up and less availability of cheaper credit for the private sector were hindering investments.

Published in The Express Tribune, August 12^th, 2012.