SBP urged to reduce interest rate

RECORDER REPORT

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) on Tuesday urged the State Bank of Pakistan (SBP) to reduce markup rate to single digit and bring it at par with China, India, Sri Lanka and Bangladesh where it is 6.56, 8, 7.75 and 7.74 percent respectively.

The LCCI President Farooq Iftikhar, Senior Vice-President Irfan Iqbal Sheikh and Vice-President Mian Abuzar Shad in their joint statement said that single digit markup was absolutely essential for Pakistan to compete with the regional economies in the world marketplace. They said that the government have to consider out-of-box proposals to propel economic activities that have been facing complacency and no growth for the past many years with alarmingly low productions and relatively high cost of doing business.

They said that the State Bank of Pakistan had failed to arrest inflation with its tight monetary policy therefore there was no point in keeping the markup rate in double digit. They said that the inflation was a matter of controlling demand and supply and if the supply chain was up to the mark, the inflation would automatically remain at comfort level.

The LCCI office-bearers said that the existing double digit markup had already caused undue damage to the economy which would take long time to recover. They said that both local and foreign investments had already nose-dived because of high cost of doing business in Pakistan, while the FDI situation in other regional economies was quite visible. They said that it was a common phenomenon that local investments are a barometer for foreign investors and negligible local investment has shied them away.

They said that the country at the moment was in dire need of energy, continuity in economic policies and a GDP growth of over six percent for next six to seven years in a row to overcome internal and external challenges.