Hike in policy rate will hit trade, industry: LCCI
LAHORE – Recent hike in policy rate will badly hit the trade and industry. 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 that the Lahore Chamber of Commerce & Industry was expecting cut in markup rates in the context of high cost of doing business but State Bank of Pakistan has 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 will halt industrial expansion. They said that 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 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 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 policy rate. The LCCI office-bearers urged the State Bank of Pakistan to make cut in markup rates to inject energy to the industrial sector.