Pakistan Textile Industry Urged Country'S Central Bank to Reduce Interest Rate to 8%

The textile industry of Pakistan has urged the country’s central bank to reduce the interest rate to 8 percent from the current 9.5 percent.
 
The request has been made ahead of the key policy rate announcement likely to be made by the State Bank of Pakistan (SBP) on April 12.
 
The textile industry representatives said a cut in interest rates is necessary to attract new investment and to create jobs.
 
Pakistan’s textile sector has borrowed over Pk Rs. 41 billion from banks during the last six months after the interest rate was cut from 13.5 percent to 9.5 percent. The borrowed money was used for making investment and acquiring latest machinery and equipment by textile manufacturers.
 
However, the present interest rate of 9.5 percent is still high and it should be brought down to 8 percent to make capital available to entrepreneurs, which would help them in bringing down the cost of production.
 
All Pakistan Textile Mills Association (APTMA) chairman Ahsan Bashir said the non-performing loans (NPL) were rapidly rising since 2008, but the increase in number of NPLs has declined after the interest rate was brought down.
 
APTMA group leader Gohar Ejaz said Pakistan’s regional competitors have invested heavily in the textile sector during the last few years and the availability of money would enable the country’s textile manufacturers to make new investment, especially in technology, where the investment is much lower than the desired level.