ISLAMABAD: Reacting to the 1pc slash in interest rate by the State Bank of Pakistan, Islamabad Chamber of Commerce and Industry (ICCI) has urged the government to make a further cut in the policy rate.
“Bringing the policy rate down to 5pc is imperative to revive business activities and turn around the downward slide of economy amid the prevalent challenging times,” said ICCI President Muhammad Ahmed Waheed in a statement issued on Saturday. “At a time when business and industry are struggling for survival due to Covid-19 pandemic, a higher interest rate in Pakistan is a major hurdle in new investment and expansion of existing businesses.”
He said to combat the challenges of Covid-19 pandemic, many countries had made a drastic cut in policy interest rates to mitigate the woes of businesses.
The ICCI president informed that policy interest rate in Malaysia and Indonesia was currently 4.50pc, while the same in India was 4.40pc, China 3.85pc, South Korea and Thailand 0.75pc, Japan -0.10pc and USA & Euro Zone zero per cent.
The ICCI president said due to Covid-19 pandemic, businesses and industrial units in Pakistan have suffered huge losses and were on the verge of collapse, adding that the current situation has made it very difficult for the business community to pay back loans taken from banks with markup.
He, however, said the government had taken a wise decision by providing relief in payment of electricity bills to small businesses.
He emphasized that SBP should also hold a dialogue with commercial banks to convince them to defer receipt of loans with markup from the business community for at least 6 months so that businessmen could revive business activities and be able to pay back the outstanding bank loans.