FPCCI chief hails reduction in policy rate

President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Mian Anjum Nisar has 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 employment. 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 lockdown situation for the 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 sustained under the prevailing conditions.

He further stated that foreign exchange reserves are increasing due to assistance from IMF, World Bank, Asian Development Bank and from some friendly countries so SBP should also control and manage the market more effectively particularly the exchange rates.

Mian Anjum Nisar emphasized that the SBP Scheme of loans to industry for salaries payment of employees should be interest free and the government should also contribute to it as it will be a liability to payback with interest for the period when industry is closed and workers are at home.

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.

Meanwhile, Chairman of the Standing Committee on Customs of FPCCI, Shabbir Mansha Churra, who is also the Founder Chairman of Pakistan Artificial Leather Imports and Merchants Association (PALIMA), has demanded of the government to waive off the levy of one percent additional duty as surcharge on warehousing of goods.

Shabbir Mansha Churra said that the economic activities are badly affected by the outbreak of COVID-19 pandemic and current situation of lockdown. The strict measures taken by the various national institutions have halted day to day business affairs including clearance of goods from ports. The traders are unable to clear their consignments due to this financial crunch.

"To save trade & industry, Govt should waive-off the levy of one percent additional duty as surcharge on warehoused goods and the penal surcharge on overstayed goods payable till 30th June 2020," he said.

Shabbir Mansha Churra also requested to extend warehousing period till 30th June 2020 for such goods which are already kept in warehouses.

"Due to penal surcharge, goods are in warehouses for several months, hence waive off these surcharge, so that traders could be relieved during this difficult time," he added.

Patron-in-Chief Capt. Moiz Khan and President Naseem Akhtar of the North Karachi Association of Trade and Industry (Nakati) said that a 2% reduction in interest rates is a good move but in present conditions most countries have reduced interest rates to zero.

They urged Prime Minister Imran Khan to reduce interest rates to zero.