The textile industry in Pakistan has welcomed the reduction in interest rates. Mill owners say this is a positive and business-friendly measure which would help industrial productivity, business turnover and exports of the country.

Interest rate has been lowered by 100 basis points from 8 to 7 per cent. The intention is to further lower it to 6.50 per cent. This step would enable the business and industry to obtain essential investment capital at cheaper rates and would also cut down the cost of production in the country.

Representatives of the textile industry say the Pakistani interest rate should eventually be brought down to zero per cent. This would enable industry and business to make investments by obtaining working capital which bears no interest. It would ultimately help investors set up new industries, import the latest machinery, increase productivity and the volume of business and trade turnover. The rate cut would also reduce the inflationary rate in the country, will have a trickle down effect on other sectors of the economy as well which will ultimately provide relief to the common man and the low income sectors of the country. Further, essential food items and daily use items would also be positively influenced and become easily available for the people.

New Zealand, Australia and some European countries have brought down the interest rate drastically.