A leading industrialist on Friday welcomed the State Bank of Pakistan (SBP) decision to reduce policy rate to single digit, saying that the reduction would help the ailing manufacturing units to regain strength. Talking to Business Recorder, a leading value-added textile manufacturer-cum-exporter, Rafiq Godil lauded the central bank for bringing down the policy rate to 9.5 percent.
"The central bank should freeze the policy rate at 9.5 percent for the next three years so that the closed and ailing manufacturing units could take full benefit of the reduction," he added. He pointed out that the apparel sector's total exports had declined in last fiscal year because of huge cost of production that led to closure of a large number of units in the country.
He said the policy rate cut would also scale down the cost of production. "The policy rate should now retain to the same level which will allow the closed manufacturing units to pay off their banks loans," Godil said and added that the non-performing loans had increased to Rs 170 billion in the last two years.