The State Bank of Pakistan (SBP) firmly believes in strengthening of textile sector, which is the backbone of the country’s economy. This was stated by Governor SBP Yaseen Anwar during a meeting with the office-bearers and members of All Pakistan Textile Mills Association (APTMA) on Wednesday. The SBP Governor said that a special committee would be formed to resolve the issues of the textile industry to make it viable and competitive in the international market.
He said that the textile sector was second to none and even in the present challenging economic scenario its achievement of around $12.4 billion export value was commendable. To a question regarding reduction in the discount rate, he said that the SBP had reduced 200 basis points during the first two quarters of the last fiscal year but due to demanding reserve position and escalating inflationary rate in the last two quarters, the bank was unable to further reduce it. However, as soon as the situation improved the discount rate would be reduced further as the SBP was fully aware that high interest rate was one of the reasons behind drastic decline in domestic as well as foreign direct investment, he added.
He assured that State Bank would issue a notification in respect of Technology Upgradation Fund as soon as advise was received from the Ministry of Textile Industry. Earlier, Mohsin Aziz, Chairman APTMA in his welcome speech highlighted the challenges being faced by the country’s textile industry.
He said that although in the year 2010-11 the exports had reached the new bench mark of $14 billion which was expected to touch $16 billion in 2011-12 but unfortunately it just crossed $12.4 billion which was 11 percent lower in value terms but in fact 30-32 percent lower in quantitative term. Aziz said that Pakistan’s regional competitors were enjoying lower and preferential interest rate but the double-digit discount rate in the country was an extra burden on the already ailing industry. He said that if SBP and the Ministry of Finance did not come up to its rescue by providing preferential and lower interest rate, the industry might collapse.
Gohar Ejaz, former Chairman APTMA said that due to increasing financial imbalances and rising inflation, capital was driving out of the country, weakening the investors’ confidence and affecting exports. In the present scenario, Pakistan needed investment and growth-oriented policy especially for export-oriented sectors by reducing the interest rate, he added. Sheikh Muhammad Akbar and Tariq Saud, Vice Chairmen APTMA, Muhammad Yasin Siddik, Chairman APTMA Sindh Balochistan Region, Ahsan Bashir, Chairman APTMA Punjab Region, Bashir Ali Mohammad and Nadeem Maqbool, former Chairmen APTMA and Ashraf Khan, Executive Director SBP, Syed Samar Husnain, Director SME of SBP and others attended the meeting.-PR
Copyright Business Recorder, 2012