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SAI chief urges SBP to bring down policy rate to 4%

KARACHI: President of Site Association of Industry, Abdul Hadi, has urged the Governor State Bank to bring down the policy rate from 7.0 percent to 4.0 percent in wake of the extra-ordinary circumstances due to the COVID-19 pandemic.

In a statement issued today (Tuesday), Abdul Hadi said that the policy rate in Pakistan was much higher than in other countries of the region. “A reduction in the policy rate is essential to make Pakistani exporters competitive and the business and industrial activities could continue unabated,” he added.

“Pakistan, like other countries in the region, should bring down the policy rate from 7.0pc to 4.0pc, which would enable exporters to easily compete in the price race in the global markets”, he added.

He further said, “In the result of the lower the policy rate, industries will flourish and the more employment opportunities will be created,” adding that the trade deficit would be reduced and foreign exchange reserves will increase also.

Abdul Hadi also demanded reduction in electricity and gas tariffs to reduce the production cost of industries, saying that Pakistani exporters should be provided equal business opportunities with those of other countries in the region.

SAI president further said that after the COVID-19 devastation, Pakistan has started receiving canceled export orders of China, Bangladesh and India, which we should take full advantage of.

“However, the government first has to reduce the production cost of industries then we can easily enjoy the export advantages and hope that the country’s exports will increase to $ 40 billion in the next two years,” he concluded.