KARACHI: Businessmen and industrialists expressed mixed reaction on unchanged basic points system (bps) in discount rate (DR) by State Bank of Pakistan (SBP) in Monetary Policy statement on Saturday. Representatives of textile, leather, marble, surgery and trade bodies were of the opinion SBP would have to cut 50 bps to 100 bps in policy announcement. SBP kept policy rate unchanged at 5.75 bps for another two months, announced by SBP. The business community said downward revision in bps could have been provide further tonic to grappling economy to some extent and better prospects for investment climate besides provide financial relief to industrialists especially exporters. All chamber of commerce and industry in the country besides industrial and trade associations along with Federation of Pakistan Chambers of Commerce and Industry, All Pakistan Textile Mills Association, Pakistan Tanners Association (PTA), Pakistan Cotton Ginners Association, Surgical Instruments Manufacturing Association Pakistan, All Pakistan Marble Mining Processing Industry and Exporters Association (APMMPIEA) and other industrial and importers trade organisations were of the opinion that surplus liquidity in market is always important and one of the prime reasons behind investment in industrial sector. Downward revision in policy rate is vital for providing more liquidity prospects to the industry, which was already braving high cost of energy and production. Cut in bps rate could have helped textile, leather, surgical and other major exporters in competitive international market where India, Bangladesh, Sri Lanka and Thailand were remained leading competitors. Cut could help to increase productivity, controlling inflation besides discourage government as it was a major borrower of commercial banks and would provide industry and exporters borrowing money on lower rates, Agha Saiddain senior member of PTA said. Reduced bank mark-up rate always encourage fresh investment in the industry particularly in leading exporting textile and leather industry besides to help increase jobs and exports of the country. Private sector gets encouragement in raising fresh funds by seeking loans from banks besides rate cut help reducing oil, food and industrial raw material bills by the government as well as industries, Ghulam Rabbani senior member Karachi Cotton Association said. Bourses in country also get benefit of rate cut as stock valuations and earnings of leveraged companies show better and for better for overall economic revival. Private sector commercial banks’ borrowing gets momentum and banks prefer lending as well as private sector pay lower interest on its borrowings. The textile, leather and other billions of dollars exporting sectors of the country have great potential to attract foreign investment. Members of KCCI said different segments of the society were expecting downward revision. Industry was facing hike in power tariffs of 65 percent, 37 percent for commercial and 17 percent for residential consumers. APMMPIEA Chairman Sanaullah Khan said policy rate cut could have help developing export-oriented industrial sectors including marble, surgical and sports, as they were in need of commercial bank loans and funds from other sources on reasonable rates. Large scale manufacturing sector is likely to gain footing due to rate cut and low prices of raw materials boost manufacturing sector. The rate cut also improves major cotton and rice crops production. It eases to help returning banks’ loan by borrowers, which decreases the ratio of non-performing loans. Analysts said the probability is high and SBP will follow a gradual policy of reducing benchmark interest rate because it is difficult to forecast global price of oil after a sudden fall. Jawed Bilwani chief Pakistan Apparel Forum said business community always asked government to adopt long term policies instead of short term policies. The decrease brings production cost lower and domestic products become enable to compete in international market. Members FPCCI and Karachi Chamber of Commerce and Industry said continuous economic burden has crippled already ailing industrial activities. In such scenario cut in bps could have to bring further liquidity to industries that makes unable industries to meet their production and export targets.