Bank finance rate rise alarms leather industry5 November 2009
Shahid Mahmud, acting chairman of Pakistan Tanners Association (PTA), central region, has said that he is vehemently opposed to a 0.5% increase in export finance rates announced by the State Bank of Pakistan on October 31. It is felt that the new rates will hit the valued added leather and finished leather products industries.
The leather industry, which is already facing problems due to the international recession as well as a difficult internal business and economic situation, said that the new tariff could close some manufacturing units down.
The leather industry has registered a decline in exports of 29% between July to September 2009 according to the Federal Bureau of Statistics in Pakistan.
Therefore, the increase in bank interest rates would further aggravate the situation and could damage the country’s second highest foreign exchange earner after textiles.
Mahmud added that this is a very crucial time for the industry when the high season for the leather and leather products industries is about to commence. The increase in the export re-finance rates at this stage could crush the value added leather sectors. He urged the government to immediately withdraw the decision of the state bank to increase the export finance rates in order to stop further declines in exports of leather and leather products.