LCCI for another cut in discount rateJune 10, 2015
Lahore: The Lahore Chamber of Commerce & Industry has said that another cut of at least 200 basis points in discount rates would not only help government to achieve the target of industrial growth but would also bring stagnant capital of the banks into circulation.
In a statement issued here Thursday, President of the Lahore Chamber of Commerce & Industry Ijaz A. Mumtaz said that business community appreciates the government for bringing the discount at historical low as a number of countries are providing cheap loans to their industrial sector on zero or less than one percent discount rates.
Ijaz A Mumtaz said that a notable cut of at least 200 basis points in the discount rate by the State Bank of Pakistan would inject fresh blood to the industrial sector which is facing a number of internal and external challenges including energy crisis.
LCCI President said that SBP initiative would also make the Pakistani products competitive in the international market as fluctuation in discount rates always control the industrial input cost.
He said that Sweden and Switzerland are providing money to their industrial sector at -0.25% and -0.75% respectively as compared to 7% in Pakistan.
Ijaz A. Mumtaz 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 in 2015.
Ijaz A. Mumtaz said that tight monetary policy stance adopted by the State Bank of Pakistan had always proved a big blow to the manufacturing sector but it is a good omen that now things are moving in right direction and State Bank of Pakistan is trying to give massive relief to the business doing people.
“We have to move forward quickly, as like as other countries of the region, to make the country a hub of manufacturing activities”, LCCI president added.
He urged the State Bank of Pakistan to announce at least 200 basic points cut in markup rates in the upcoming monetary policy to achieve another historical milestone.