Business community for reducing interest rate

• They urged for further bringing policy rate down to 5 percent as 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 to combat the challenges of Covid-19 pandemic, many countries had made drastic cut in policy interest rates in order to mitigate the woes of businesses.
• He said this situation had made it very difficult for business community to pay back loans taken from banks with mark up.

ISLAMABAD: Islamabad Chamber of Commerce and Industry (ICCI) reacting to the 1 percent slash in policy interest rate by the SBP, urged the government to make further cut in interest rate.

They urged for further bringing policy rate down to 5 percent as 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.

Muhammad Ahmed Waheed, President, Islamabad Chamber of Commerce and Industry 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 to combat the challenges of Covid-19 pandemic, many countries had 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 USA & Euro Zone zero percent.

The interest rate in Pakistan was on higher side that should be reduced to minimum 5 percent, he added.

It would alleviate the difficulties of business sector and help in revival of economic activity.

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.

He said this situation had made it very difficult for business community to pay back loans taken from banks with mark up.

He said 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 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.