AGL 38.15 Increased By ▲ 0.90 (2.42%)
AIRLINK 121.51 Decreased By ▼ -2.51 (-2.02%)
BOP 5.85 Increased By ▲ 0.23 (4.09%)
CNERGY 3.75 Increased By ▲ 0.03 (0.81%)
DCL 8.40 Increased By ▲ 0.15 (1.82%)
DFML 40.89 Increased By ▲ 0.62 (1.54%)
DGKC 84.60 Decreased By ▼ -1.14 (-1.33%)
FCCL 32.70 Increased By ▲ 0.10 (0.31%)
FFBL 65.50 Decreased By ▼ -1.00 (-1.5%)
FFL 10.05 Decreased By ▼ -0.11 (-1.08%)
HUBC 103.80 Increased By ▲ 0.70 (0.68%)
HUMNL 13.25 Decreased By ▼ -0.15 (-1.12%)
KEL 4.43 Increased By ▲ 0.18 (4.24%)
KOSM 7.09 Decreased By ▼ -0.09 (-1.25%)
MLCF 37.50 Decreased By ▼ -0.80 (-2.09%)
NBP 60.25 Decreased By ▼ -4.76 (-7.32%)
OGDC 172.25 Decreased By ▼ -1.55 (-0.89%)
PAEL 24.80 Decreased By ▼ -0.10 (-0.4%)
PIBTL 5.70 Decreased By ▼ -0.10 (-1.72%)
PPL 141.69 Decreased By ▼ -1.01 (-0.71%)
PRL 22.72 Decreased By ▼ -0.26 (-1.13%)
PTC 14.74 Decreased By ▼ -0.37 (-2.45%)
SEARL 64.56 Decreased By ▼ -0.79 (-1.21%)
TELE 7.14 Increased By ▲ 0.14 (2%)
TOMCL 35.50 Decreased By ▼ -1.41 (-3.82%)
TPLP 7.29 Decreased By ▼ -0.05 (-0.68%)
TREET 14.20 Decreased By ▼ -0.08 (-0.56%)
TRG 51.75 Increased By ▲ 2.05 (4.12%)
UNITY 26.60 Increased By ▲ 0.45 (1.72%)
WTL 1.22 Decreased By ▼ -0.02 (-1.61%)
BR100 9,483 Decreased By -118.3 (-1.23%)
BR30 28,371 Decreased By -202.1 (-0.71%)
KSE100 88,967 Decreased By -1319.8 (-1.46%)
KSE30 27,827 Decreased By -515.9 (-1.82%)

State Bank of Pakistan (SBP) Governor Dr Shamshad Akhtar has advised the business community to suggest amendments in long-term machinery finance scheme and locally made machinery finance (LMM) scheme for their better utilisation.
Addressing the members of Site Association of Industry (SAI) on Wednesday, she said that these schemes had remained under-utilised and business community seemed reluctant to get benefits of these schemes.
She noted that long-term machinery finance scheme provides finance for import of machinery at 7 percent mark-up. This scheme had an allocation of Rs 23 billion, out of which only Rs 5.3 billion had been utilised.
Likewise, LMM is a scheme to finance locally made machinery, at 11.5 percent mark-up. Under this scheme, there is a limit of financing up to Rs 2 billion. This scheme remained unutilised, she added.
She advised the banking sector to process all applications received for financing under these schemes.
She said that if these schemes were no longer required they should be abandoned.
Dr Shamshad Akhtar said that tight monetary policy would continue until inflation came down, and the mark-up rates came down. As long as inflation was higher, interest rates would remain higher.
About devaluation of Pak rupee, the SPB governor said that there was no proposal, under consideration, to devalue the rupee against foreign currencies.
She said that devaluation "plays no role in boosting export, but creates other problems". However, she added that devaluation policy might be changed, depending on future economic conditions.
She said that recently the dollar had depreciated against other currencies that might help boost Pakistan's exports.
Commenting on trade deficit, she said that trade deficit figures, provided by Federal Bureau of Statistic (FBS), did not match with the figures of SBP. FBS statistic claim trade deficit at 8 billion dollars, whereas SBP figures indicate it at 6.2 billion dollars. as per July-March 2006 report. SBP figures are more accurate than FBS, she claimed.
She said that by the end of 2005-06, trade deficit figures were likely to touch $7 to 8 billion. The State Bank Governor said that higher rate of deficit was a cause of concern. "We have enough resources to face the trade deficit", she added.
She said that Pakistan has around $13 billion reserves, besides remittances, privatisation proceeds, bonds etc which may be used to bridge trade deficit.
Dr Akhtar advised the business community to boost exports, "which is the only way to bridge trade deficit".
About export refinance rates, she said that export refinance rates scheme was introduced in 1970. Highest utilise of 67 percent was textile sector. Then came to rice and other food items exporters.
She said that export refinance rates at 9 percent was not high as compared to other countries. Indian export refinance rates are 10.75 percent.
She said that in the past the business community had misused export refinance scheme.
Criticising the business community for placing demand of reducing taxes, interest rates, utility charges etc, and said that she served 6 years as World Bank Consultant in India and saw that business community of India did not make demands. "They just concentrate on their business activities. They have no time to hold meetings with ministers." She expressed surprise over business community having time to spend in meetings and other non-business activities.
Welcoming the guests, SAI Chairman Ameen Bandukda said industrial growth had already weakened during the first quarter of the year, registering a growth of only 6.1 percent, compared to 19 percent in the corresponding period of last year. There has been a distinct slowdown in large-scale manufacturing, which only grew by 8.7 percent in the first quarter compared to 24.9 percent in the corresponding period of last year.
He said that in 2004-05, GDP grew by 8.4 percent but this year it is expected to slow down substantially.

Copyright Business Recorder, 2006

Comments

Comments are closed.