KARACHI: The majority of export-oriented sectors and industrial units in the country were of the view that State Bank of Pakistan (SBP) should have considered at least one percent downward change in basis point system (Bps) in the policy rate. “The SBP in view of high cost of doing business and delayed government initiatives in relief packages to exporters could reduce discount rates by one bps to 4.75 percent for a period of next two months.” Earlier, the SBP had kept policy rate unchanged at 5.75 percent for another two months. Downward correction in bps could have provided tonic to grappling economy to some extent and better prospects for investment climate besides provide financial relief to industrialists especially exporters, business community said. Representatives of almost all chamber of commerce and industry in the country, 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 (PCGA), Pakistan Yarn Merchants Association, Surgical Instruments Manufacturing Association Pakistan (SIMAP), All Pakistan Marble Mining Processing Industry and Exporters Association (APMMPIEA) and other industrial and importers trade organisations said downward revision in policy rate provides more liquidity prospects to the industry, which was already braving high cost of energy and production. Policy rate cut could provide relief to textile, leather, surgical and other major exporters in the competitive international market where India, Bangladesh, Sri Lanka and Thailand were remained leading competitors. It would 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, said Agha Saiddain, senior executive member of PTA. Surplus liquidity in the market is always important and one of the prime reasons behind investment in the industrial sector, he opined. Reduced bank mark-up rate encourages fresh investment in the industry particularly in leading exporting textile and leather industry, he said. SBP’s change policy rate helps keep the cost of living, cost of doing business and rate of defaults and unemployment within control limits, he added. Private sector could get encouragement raising fresh funds by seeking loans from banks, said Ghulam Rabbani, senior member of PYMA. Bourse in the country can also be benefitted by rate cut as stock valuations and earnings of leveraged companies go better for overall economic revival, opined an expert on stocks. Control unemployment and expansion plans of industry would become better if mark up would come to around 5 percent, he said. Private sector commercial banks’ borrowing to get momentum and banks prefer lending as well as the private sector becomes able to pay lower interest on its borrowings. Macroeconomic indicators continued to show resilience towards improving economy. The textile, leather and other billions of dollars exporting sectors of the country have great potential to attract foreign investment. Members of the Karachi Chamber of Commerce and Industry (KCCI) said different segments of the society were expecting downward revision up to one percent. Industry was facing hike in power tariffs of 68 percent, 39 percent for commercial and 19 percent for residential consumers. All Pakistan Marble Mining Processing Industry and Exporters Association (APMMPIEA) Chairman Sanaullah Khan said policy rate cut to 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 likely to gain footing on rate cut and low prices of raw materials can boost manufacturing sector. The rate cut also improves major cotton and rice crops production. It would ease to help returning the banks’ loan by borrowers, which would decrease the ratio of non-performing loans. This rate cut would help smoothing food supplies, contain the price of perishable items, administrative prices and there was likely a low inflation rate. However, members of the FPCCI said keeping bps rate unchanged by SBP could be understandable under current economic policies of government. “We should keep policy rate within the range of regional countries where it is less than us.” On the other hand, rising exports and foreign direct investment and remittances not enough to offset a sharp jump in imports, including cost of petroleum products and machinery for infrastructure projects as part of China-Pakistan Economic Corridor could put pressure on overall balance of payment. With foreign reserves dwindling, some analysts have opined Pakistan might need an International Monetary Fund bailout to avert a balance of payments crisis akin to the one it suffered in 2013, when it also sought the IMF help.