Textile exporters term SBP decision 'a good message'

Textile exporters have hailed the State Bank's decision to slash discount rate by 150 basis points to 10.5 percent and termed it as progressive and realistic support to Pakistani textile exports. Reduction in interest rate is a step in the right direction but this decision is not enough to put the trade and industry back on track as interest rate is still too high and should be brought down to single digit.
Talking to newsmen, Rana Arif Touseef, Chairman Pakistan Textile Exporters Association (PTEA), termed it a good message delivered by the government; however, bringing the discount rate at single digit would be more beneficial for the promotion of trade and industry in the country, he added.
He said it would help encourage long-term investment and coupled with zero loadshedding would accelerate economic activities throughout the country. Considering the current economic slowdown, the SBP made a cut in the discount rate which was highly appreciative, he said, adding the step was need of the hour and an imperative move towards the revival of the economy and the industry.
Cut in discount rate was longstanding demand of textile exporters to enhance the production, which was badly affected by various reasons, including high discount rate, he added. High mark-up rate and less availability of cheaper credit for the private sector especially for setting up industrial units or reviving sick industrial units hindering the future investment, he said. Severe energy crisis and precarious law and order conditions continued to render domestic economic environment least conducive for productive activities, he further said.
Rana Arif said Pakistan was passing through tough economic conditions, which was further giving rise to industrial uncertainty, poverty and frustration. As a consequence of energy crisis, the textile production capacity of various sub-sectors has been reduced by 50 percent. Electricity loadshedding was causing extraordinary production losses and badly affecting capability of the industry. The cost of production has also risen due to instant increase in electricity and gas tariff. Such levies have decreased competitiveness of this industry in international market, he stated. In the larger interest of the economy and exports, the government should brought interest rate to single digit, he demanded.