KCCI rejects 50bps rate-cut by SBP


Karachi Chamber of Commerce and Industry (KCCI) Saturday expressed its dissatisfaction over the 50 basis points decrease in the discount rate by the State Bank of Pakistan on Friday. In a statement issued here Saturday, President KCCI Muhammad Haroon Agar said the business community was expecting a decrease of 100 basis points in discount rate which was also a long-withstanding demand to bring the discount rate to a single digit. He said the decrease of 50bps would not be much beneficial and urged the regulator to drastically cut down the discount rate to the level of 6 to 7 percent enabling the business community for level-playing field with the competitors in the region. The deteriorating law and order situation, energy crises and exorbitant increase in the POL prices have already slowed the pace of industrial and commercial activities as well as the economy. The high discount rate has also brought an upshot and increase in the cost of doing business, said Agar. The tightened monetary policy, he said, had also impeded the progress of private sector with adverse affects on the economy. “Due to increased discount rates, the Non-Performing Loans of banks are also increasing, therefore, the state of affairs demand government to take notice of the facts before taking decisions,” the KCCI chief said. He opined that a rate-cut to 6-7 percent would enhance in the country economic and commercial activities and would also be a ray of hope motivating the abroad shifted industrial units to come back to Pakistan. This he said would also increase the domestic and foreign investment, something the country needs the most.