The business community at Islamabad Chamber of Commerce and Industry (ICCI) on Saturday demanded of the government to make further cut in interest rate and bring it down to 5 percent.

The ICCI president Muhammad Ahmed Waheed in a statement said in the prevailing circumstances, a low policy interest rate was the key requirement for reviving the business activities and turning around the downward slide of economy.

He said at a time when business and industry were struggling for survival due to Covid-19 pandemic, high interest rate in Pakistan was a major hurdle in new investment and expansion of existing businesses. He said that to combat the challenges of COVID-19 pandemic, many countries have made drastic cut in policy interest rates in order to mitigate the woes of businesses.

He said policy interest rate in Malaysia and Indonesia was currently 4.50 percent, India 4.40 percent, China 3.85 percent, South Korea and Thailand 0.75 percent, Japan -0.10 percent and the US and Euro Zone zero percent, but interest rate in Pakistan was still on higher side that should be reduced to minimum 5 percent. It would alleviate the difficulties of business sector and help in revival of economic activity.

Muhammad Ahmed said due to Covid-19 pandemic, businesses and industrial units in Pakistan have suffered huge losses and were on the verge of collapse. He said this situation has made it very difficult for business community to pay back loans taken from banks with mark up. He said that government has taken a wise decision by providing relief in payment of electricity bills to small businesses.

The ICCI president emphasized that SBP should also hold a dialogue with commercial banks to convince them to defer receipt of loans with mark up from business community for at least 6 months so that businessmen could revive business activities and be able to pay back the outstanding loans of banks with mark up.