Lahore: The Lahore Chamber of Commerce and Industry has demanded of the State Bank of Pakistan to bring down interest rate by at least 150 to 200 basis points to give a jumpstart to the economic activities and to revive the industrial sector.
In a statement issued here Thursday, LCCI President Ijaz A Mumtaz said that interest rate is an important input for the industrial sector and always influences the cost of production. He said that how we can even imagine to compete the countries like Japan, Sweden and Switzerland in the international market where industry is being financed at 0% interest rates. He also cited the examples of Austria, Belgium, Canada, France, Germany, Greece, Hong Kong, Italy, Malaysia, Singapore, Spain, Thailand, United Kingdom and United States where interest rates are 0.05%, 0.05%, 1%, 0.05%, 0.05%, 0.05%, 0.50%, 0.05%, 3.25%, 0.12%, 0.05%, 2%, 0.50% and 0.25%.
Ijaz A. Mumtaz said that the benchmark interest rate in Pakistan was last recorded at 10 percent. He said that interest Rate in Pakistan averaged 12.55 Percent from 1992 until 2014, reaching an all time high of 20 Percent in October of 1996 and a record low of 7.50 Percent in November of 2002.
He said that State Bank of Pakistan has to bring down the interest rates keeping in view the ground realities and strict competition in the international market. He said that a cut of 50 to 100 basis points would not be doing any service to the challenged economy.
He said that it was very unfortunate that we have failed to learn any lesson from the tighter monetary policy stance adopted by the State bank of Pakistan in the yester years.
LCCI President said that ongoing economic scenario shows that there is hardly any time left for economic managers of the country and they all should understand well that a 50 to 100 basis point cut will be too little.
He said that it is now before all of us that high markup rate is no more sustainable. It has been causing a great harm to economy and would continue to do so unless and until a realist approach is adopted.
Ijaz A. Mumtaz said that 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 interest rate.
He urged the State Bank of Pakistan to announce at least 150 to 200 basic points cut in markup rates that would certainly give jumpstart to the economic activities in the country.