The Pakistan Industrial and Traders Associations Front has appreciated the State Bank of Pakistan for announcing new measures to help boost exports, asking the central bank to also take steps to improve the ease of doing business environment for local industry, giving them more confidence for smooth production amidst slowdown triggered by the coronavirus fear.
PIAF Chairman Mian Nauman Kabir, in a joint statement along with senior vice chairman Nasir Hameed and vice chairman Javed Iqbal said that it is right step of the central bank for a further cut of 150 basis points in the policy rate on 24th March after reducing it by 75 basis points earlier on March 17. However, there is also need of announcing some incentives for the local industry, as the steps for the exporters have not benefit in present scenario due to cancelation of orders by the foreign buyers. At this time the government should support the domestic industry so that demand and supply balance could remain intact in the country.
Mian Nauman Kabir said that central banks all over the world are using various kinds of instruments to avoid recessionary tendencies and stimulate growth in their economies because of the spread of the devastating coronavirus.
There is no doubt that the new measures have been taken because Pakistani exporters are facing problems due to declining demand of their products in the international market and the difficulties in executing existing orders due to rapid spread of coronavirus in the global markets. These measures will prevent liquidity problems and exporters will continue their operations, he added.
PIAF chairman said that the facilitation measures cover almost all aspects of export business and include relaxation in matching amounts under EFS, extension in time period to ship goods, relaxation in conditions for LTFF, realization of export proceeds and extension in the time period for import of goods.
PIAF senior vice chairman Nasir Hameed said that realizing that Temporary Economic Refinance Facility was too little under the circumstances, the State Bank announced another relief package to support exporters affected by the loss of demand due to the COVID-19 threat and avoid liquidity crisis in the export sector. The SBP had already offered Export Finance Scheme and Long-Term Financing Facility to banks worth Rs 660 billion for extending cheap credit lines to exporters.
