‘Hike in policy rate to badly hit trade, industry alike’

LAHORE: “Recent hike in policy rate will badly hit the trade and industry alike. The business community will not be able to get cheap money that will also halt the industrial expansion.”

In a statement, LCCI President Mian Nauman Kabir, Senior Vice President Mian Rehman Aziz Chan and Vice President Haris Ateeq said the Lahore Chamber of Commerce & Industry (LCCI) was expecting cut in mark-up rates in the context of high cost of doing business but State Bank of Pakistan had moved opposite and announced another raise of 150 basis points.

“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 would halt industrial expansion.

They said the policy rate should be brought down to the single digit to give a jumpstart to the economic activities and to ensure cheap financing for industrial sector. They said that high mark-up rate was 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 had 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 cut in mark-up rates to inject energy to the industrial sector.

Copyright Business Recorder, 2022