LAHORE: The Lahore Chamber of Commerce & Industry (LCCI) is shocked by increase in policy rate by the State Bank of Pakistan to 9.75 percent and feared that this blow will put a reverse gear to all the efforts for bringing down the cost of doing business.
In a statement, LCCI President Mian Nauman Kabir, Senior Vice President Mian Rehman Aziz Chan and Vice President Haris Ateeq said that the LCCI was expecting cut in markup rates in the context of high cost of doing business and post-covid arena but the State Bank of Pakistan moved opposite and announced another raise of one percent.
The LCCI office-bearers said that hike in policy rate brought borrowing cost to the highest in the last 20 months.
“How our industry can compete those countries in the international market where policy rate is zero or below the zero”, the LCCI office-bearers questioned and said that high policy rate will halt industrial expansion.
They said that the policy rate should be brought down to at least 5 percent to give a jumpstart to the economic activities and to ensure cheap financing for industrial sector. They said it is now before all of us that high markup rate is no more sustainable as it has been causing an immense harm to economy and would continue to do so unless and until a realist approach is adopted.
The LCCI office-bearers said that despite higher inflation all the major economies have either curtailed or are in the process of reducing high interest rates to protect their economies.
They said the State Bank of Pakistan should understand that its continued tighter stance is inflicting a very heavy loss on the nation as the economy has already paid a very high price because of high policy rate. The LCCI office-bearers urged the State Bank of Pakistan to make at least 400 basis points cut in markup rates to inject energy to the industrial sector.
Copyright Business Recorder, 2021
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