APTMA demands reduction in interest rate by 150 basis points
All Pakistan Textile Mills Association (APTMA) demands reduction in interest rate by 150 basis points in the upcoming monetary policy, likely to be announced tomorrow. Chairman APTMA Ahsan Bashir, along with Group Leader APTMA Gohar Ejaz, urged the central bank to further ease its policy rate as textile Sector has invested $400 million in new technology in last six months as the Central Bank gradually eased its monetary policy.
Copyright Business Recorder, 2013
He said double digit mark-up has ruined the growth of textile industry amidst unprecedented energy crisis. The State Bank of Pakistan brought down the rate from 13.5 percent to 9.5 percent in last one year, textile exports have responded in the shape of exponential exports, growing by 8 percent this fiscal, added the APTMA leadership. He said after almost five years the industry has invested in balancing modernization.
According to him, the investment in technology is still much below the desired level, he said adding that Pakistan needs to upgrade its textile sector rapidly to catch up with its regional competitors that invested heavily in textiles during the last five years. Bank mark-up even after some easing is still the highest in Pakistan compared with India, China and Bangladesh, he said. He asserted that the central bank should lower its mark-up rate by at least 1.5 percent this week to spur industrial growth.
The APTMA leadership said that the reduction in mark-up has a positive impact on the non-performing loans as well. He said that the NPLs of the textile sector have been rapidly rising since 2008 but ever since the central bank started easing the interest rates the growth in NPLs has stopped. He said the increase in exports and investments in textiles despite unbearable load shedding shows the huge potential of this industry. He said it is high time that should exploit this potential through interest rate facilitation, adding that the other measures would follow. He said the growth would accelerate in all sectors if the interest rates are reduced to regional level.