KARACHI: The business community has widely appreciated the central bank’s decision to cut the interest rates by another 150 basis points, which coincided with the Prime Minister’s economic relief package announcement on Tuesday.
Industrialists believe that as coronavirus pandemic had triggered a slowdown, interest rate cut would provide stimulus to the economy and restore traders’ trust in the government.
Former President Karachi Chamber of Commerce and Industry (KCCI) Zubair Motiwala welcomed the central bank’s decision to reduce the interest rates adding this would be quite helpful for the industry.
“We were anticipating 300 to 400 bps rate cut given the prevailing circumstances. Now, the its has been reduced by 225 bps, which is welcomes and we are grateful,” Motiwala said adding the authorities should also consider freezing payment of utility bills, government taxes and interest collection by banks for the lock down period.
Former Senior Vice President of Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Mirza Ikhtiyar Baig appreciated the government and central bank for this reduction in the interest rates.
“It is a very positive step. 100bps cut in interest rates saves Rs200 billion on government debt obligations. It would help contain current account deficit, while reduction in fuel prices would ease inflation.”
Baig said the markets around the world were closed. “There were no buyers, and the industry was going through a crisis. Such a relief would reduce cost of doing business and enable the industrialists provide working capital helping industry to survive.”
CEO Alpha Beta Core Khurram Shahzad appreciated the decision saying that the rates had to come down. “This would government’s burden of debt significantly, while lower oil prices would result in annual saving of $3-4 billion. A strategy is needed to make the most of these savings so that the vulnerable sector is protected and employers are incentivized”.
President Union of Small and Medium Enterprises (UNISAME) Zulfiqar Thaver appreciated the steps taken to reduce the burden on the small to medium entrepreneurs.
He urged all entrepreneurs to utilize the time for planning and completing pending work till such time the lockdown because of Coronavirus exist.