The State Bank of Pakistan (SBP) has reduced its discount rates by 50 bps to 8% for the next two months. The discounted rate has reached its lowest level for almost 13 years of the SBP history.

Industrialists in the country have said that it would provide a tonic to the economy, a better investment climate and financial relief to industrialists especially exporters.

Representatives of a number of bodies including the Pakistan Tanners Association (PTA), said the downward revision in the policy rate would provide more liquidity for industry, which was already living with high energy and production costs.

It would help to increase productivity, control inflation, discourage government borrowing at commercial banks and allow industry exporters to borrow money at lower rates, Agha Saiddain senior member of PTA said.

Surplus liquidity in the market is always important and one of the prime reasons behind investment in the industrial sector, he added.

A reduced bank mark-up rate would encourage fresh investment in the industry particularly in the leading exporting textile and leather industries besides, increase jobs and exports say the PTA.

Source: The Daily Times