Karachi: President Lasbela Chamber of Commerce and Industry (LCCI), Ismail Suttar has opposed the State Bank’s decision to keep monetary policy unchanged at 10 percent for the next two months despite the fact that various economic indicators of the country have started showing signs of improvement.
In a statement he said that exporters have already suffered monetary losses due to abrupt fall of dollar and facing financial crunch, the central bank has remained unmoved while industry was expecting at least one percent reduction in interest rate.
He urged the State Bank to review its decision and bring down the key policy rate by at least 1 percent to 9 percent in order to reduce the cost of doing business and give some relief to the business community members who are already under immense pressure due to recent depreciation of US dollar.
President LCCI further advised the government to take business community on board prior to taking such decisions having a direct impact on cost of doing business.
He said the mechanism to control inflation through this measure would not work as government the major borrower of the banks borrowed huge money. He added that the availability of surplus liquidity in the market is always essential as its absence is the prime reason behind lack of investment in the industry.
Reduction in bank mark-up rate could encourage fresh investment in the industry particularly in the textile and other industry and increase jobs and exports of the country.
Suttar who is also a Vice President of FPCCI said that private sector borrowing remains still very low as banks prefer lending to the government and a hike in the key policy rate would amount to punish the masses, as well as the private sector as they would have to pay more interest on borrowings.
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