KARACHI: Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has urged the State Bank to cut interest rate to a single-digit, calling it "inevitable" for textile export growth.

In a letter to the SBP governor, Central Chairman of the PHMA, Syed Nahid Abbas requested for a reduction in the discount rate to help the textile export industry, which has been affected by the soaring production costs.

Citing a "noticeable" 9.6 percent decline in the Consumer Price Index (CPI) on a year-over-year basis, he argued that the 19.5 percent discount rate should be lowered accordingly to reflect the easing inflation.

He said that the business and industrial sectors laud the fall in inflation. However, he highlighted the "severe" financial constraints faced by local businesses and the export sector are exacerbating economic challenges for them.

He urged the government and authorities to prioritize exports, as a mainstay of the national economy. He called for strong support and a fair business environment to help export industries grow, increase foreign exchange, boost revenue, and create jobs.

The PHMA Chairman also highlighted the "unprecedented" challenges faced by the value-added textile export industry, including the abrupt and unpredictable government policy shift, the SBP's high discount rate and changes to the Export Finance Scheme.

He added that the discontinuation of the Regionally Competitive Energy Tariff, along with the record input costs and the highest-ever manufacturing expenses are severely impacting the textile sector's competitiveness and growth potential.

Copyright Business Recorder, 2024