PESHAWAR
Sarhad Chamber of Commerce and Industry voiced concerns over the decision of State Bank of Pakistan to maintain policy rate status quo, stating that it continues to impose a heavy premium compared to core inflation.
It called upon the State Bank of Pakistan to reconsider the 11 percent interest rate policy amid growth concerns, essentially projecting an inflationary downward trend, shown by statistics of economic indicators.
The SCCI said that to turbocharge economic growth, the SBP should have reduced the interest rate at single digit to zero-rate in one go.
In a joint statement issued here on Tuesday, SCCI president Fazal Moqeem Khan, senior vice president Abdul Jalil Jan, vice president Shehryer Khan, along with members of the chamber executive committee said it is unfortunate that the interest rate was not cut.
They stressed that bringing down the policy rate to single digit is essential to stimulate economic growth and investment, especially as inflation is on a downward trend, as claimed by the government and reflected in its economic figures.
SCCI senior office bearers described the SBP’ decision as an overly cautious and counterproductive stance given easing inflation and worsening industrial competitiveness
Moqeem emphasised that such high interest rates have rendered Pakistan’s industrial sector uncompetitive in the regional and global markets.
The SCCI chief pointed out that the steady decline in inflation and signs of economic improvement should have been considered by the SBP.
“The business community has consistently demanded that the interest rate be brought down to single digits, but the MPC does not seem to take our demands seriously,” he said.
Therefore, Moqeem stressed the need for the key interest rate to be reduced to single digits.
SCCI senior office bearers highlighted that this would help Pakistani exporters compete in regional and international markets by lowering the cost of capital.
Additionally, they called for the government to honor its commitments to rationalize electricity tariffs for industries and address gas supply shortages.
Fazal Moqeem Khan urged the SBP to support the government’s efforts to promote industries and contribute to the realisation of Prime Minister Shehbaz Sharif’s vision
He added that industrial growth is crucial for the country’s development and that easy access to loans on favourable terms could set Pakistan on a path to progress.
