PESHAWAR: Business community has urged the government to cut down interest instead of making any further increase in the policy rate in order to revive and boost up economy, business and trade activities affected by the coronavirus pandemic in the country.
This was stated by Sarhad Chamber of Commerce and Industry president Sherbaz Bilour during a meeting with traders and industrialists here at the chamber house on Wednesday.
SCCI chief anticipated that the government is likely to increase interest rate up to 2 per cent, which according to him, would be proved detrimental for Covid-19 hit local economy, businesses and trade. He urged the government to reduce policy rate to single digit level in order to save business from the negative impact of coronavirus.
Sherbaz Bilour said that if the government plans to further increase the interest rate that can make local industries uncompetitive against other investors, which wasn’t in the best interest of the country’s economy and businesses.
He observed that the business and trade activities have slowed down because of closure of border and prolonged coronavirus lockdown. Therefore, he emphasized that the policy rate should be cut down in order to sustain present businesses and industries and attract new investment in the country.
Owing to covid-19 pandemic, SCCI president informed that many countries across the world had brought down interest rates at single digit level to save businesses from further damages but he said the State Bank of Pakistan retained policy rate at 7 per cent, which should be reduced at single digit.
Keeping in view the current scenario, Sherbaz Bilour said the international financial institutions and lenders have predicted reduction in Pakistan’s economic growth. He said the retaining policy rate at 7 percent was tantamount to discourage new investment, due to which investors didn’t take interest to make investment in different development projects in the country. He stressed the need for industrialization and services to retain the economic growth.
He said the present interest rate which stood at 7 percent, was not favorable for covid-19 hit businesses and industries. Now, he said the government plan to make 2 per cent further increase in policy rate, which is unfeasible and unviable for industries and the country’s economy that would also increase inflation.
Furthermore, he added that industrialization would be stagnant, if the government would make an increase in the interest rate as no one would be ready to obtain loans for business. He said that the government’s unsustainable economic policies and bearish trend in business and trade activities have created disappointment among the investors and are not taking to make investment in Pakistan.