Press Coverage

PRESS RELEASE

Interest Rate Cut To Stimulate Private Sector Growth

January 27, 2015

The All Pakistan Business Forum on Saturday hailed State Bank of Pakistan’s decision to cut interest rate by 100 basis points, saying it would help stimulate private sector growth.

APBF newly-elected President Mr. Ibrahim Qureshi, in a statement, however, called for measures to overcome energy crisis, security challenges and political instability to make interest rate cut meaningful and result-oriented.
The APBF President said that business community continued to term a considerable cut in policy rate a panacea to low investment phenomenon.

It would provide elixir to grappling economy to some extent and better prospects for investment climate besides would provide financial relief to industrialists especially exporters, they added.
Mr. Ibrahim Qureshi said downward revision in policy rate would create liquidity to the industry, which was already braving high cost of energy and production besides other crisis.
Policy rate cut would provide help to the exporters in the competitive international market besides growing productivity level.
Mr. Ibrahim Qureshi said that the industry had asked the SBP to reduce 200 basis points this time but even half of that relief would be highly welcomed by the business community particularly the industry. Industrial sector in Pakistan is still uncompetitive as compared to the countries like Japan, Sweden and Switzerland in international market where industry is being financed at zero percent interest rates. In Austria, Belgium, Canada, France, Germany, Greece, Hong Kong, Italy, Malaysia, Singapore, Spain, Thailand, United Kingdom, United States and even India interest rates are very low.
APBF President said that availability of surplus liquidity in the market is always essential and prime reason behind investment in the industry.
Higher rate never helped government in reducing imports of oil, food, raw material and essentials while it has reduced growth and savings, triggered unemployment and made imports costly.
This step would help to control unemployment and expansion plans of industry and it would be better if mark up would come to 7-8 percent.”

M. Ibrahim Qureshi

President APBF