ICCI for hefty cut in discount rate to ensure macroeconomic stability

ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) Wednesday said that there was need of hefty cut in the discount rates by the State Bank of Pakistan as reduction of 50 basis points would not provide any benefit to the business community.

"SBP has only reduced its policy rate by 50 basis points whereas business Community was expecting hefty cut in discount rate in new monetary policy in line with international trend," ICCI President, Mehfooz Elahi said during a meeting with business leaders at the Chamber house.

The reduction of 0.5 percent in interest rate would not provide any benefit to business men, he added.

To control the damaging effects of current recession on the employment and investment, government should have announced an expansionary policy to boost growth of business and industrial activities and overcome the problems of unemployment and poverty.

ICCI President said that power shortages have emerged as one of the most critical factors hampering economic activity in the country.

There is a dire need of immense cut in interest rate to create some room for improving the chances of economic recovery and to remove systemic risks for the financial sector as well, he added.

He said that the government had declared year 2010 as the Year of Industrial Revival but no relief was provided to ailing industry.

SPB should take measures to stop this trend and come up with concrete policies to support SMEs and industries, he emphasized.

Copyright APP (Associated Press of Pakistan), 2011