The Islamabad Chamber of Commerce and Industry has called upon the State Bank of Pakistan to make a drastic cut of 150 basis points in the key discount rate in the forthcoming monetary policy expected on January 24, 2015, in order to create favourable conditions for private sector growth and acceleration of business and economic activities.
President Muzzamil Hussain Sabri, senior vice president Muhammad Shakeel Munir and vice president Muhammad Ashfaq Hussain Chatha of the Islamabad Chamber of Commerce and Industry said that cost of credit in Pakistan was quite high and was hampering the growth of private sector up to potential. They said reducing the key policy rate to 8 percent would provide cheap credit and help businesses to expand and grow fast leading to significant improvement in the national economic output.
They said more than 50 percent fall in global oil prices, lower import bill, and other factors have created a good space for the government to make 150 basis point cut in key policy rate as the economy badly needs a low rate scenario to accelerate the pace of its growth.
They said Pakistan’s economy has been struggling since long to recover from its weak phase of growth and drastic cut in key policy rate would provide a favourable push to spur demand and trigger economic activities. They said the falling international oil prices and decreasing export demand have also prompted neighbouring economies including India to take bold measures to ease the monetary policy and Pakistan should not miss this good opportunity to improve its economy.
They said the tight monetary policy had mostly restricted the economic development of the country as it crowded out the private sector from credit, discouraged new investment and stalled the business and industrial growth. They said it was high time that government should ease monetary policy to help the businesses expand and play more effective role in the economic revival of the country.
