Cut in policy rate to revive economy: LCCI

LAHORE: While welcoming 1.5 percent cut in the policy rate after a long period of eight years, Lahore Chamber of Commerce and Industry here on Saturday said that it was the first step towards the revival of economy and the industry.

Soon after the announcement of Monetary Policy, the LCCI President Irfan Qaiser Sheikh said, the step taken by the State Bank of Pakistan (SBP) would help to strengthen the economic indicators. He hoped that after two months when new monetary policy would be announced, the interest rates would further be lowered to single digit.

Irfan Sheikh also thanked the Prime Minister Syed Yusuf Raza Gilani for accepting the Lahore Chamber's demand regarding drastic cut in the mark up rate. It is to mention that two days back, during his one-to-one meeting with the PM, the LCCI President had raised the issue of high mark up rate and the Prime Minister had assured him of bringing down the interest rate.

The Prime Minister Syed Yusuf Raza Gilani had proved that he was ready to go to any extent for the revival of the economy and the industry in the country, he added.

The LCCI President said that the availability of cheaper liquidity to the business community was need of the hour as in the last five years, the SBP's tighter monetary policy stance in the name of financial discipline had failed to give any tangible results.

He said that the provision of ample cheaper liquidity was a must to create new businesses but in the last five years the higher interests kept the private sector growth at the lowest ebb, causing huge damage to the businesses and unemployment graph also witnessed an unusual surge.

The President urged the SBP Governor to review all other economy related banking policies and facilitate the private sector that is engine of the growth. He said that in the developed economies, the mark up rate is in single digit and they are maintaining it at all costs in the larger interests of their respective economies.

Therefore, the SBP Governor should bring it to a single digit in the monetary policy to be announced after two months.

Copyright APP (Associated Press of Pakistan), 2011