KARACHI: President of the Karachi Chamber of Commerce and Industry (KCCI), Abdullah Zaki, has said that to spur economic growth and industrialization in the country, the State Bank of Pakistan must bring down discount rate by at least 1 percent to 9 percent in the forthcoming Monetary Policy Statement for next two months.
In a statement issued, President KCCI said that the business community expected cut in discount rate as all key economic indicators, ranging from gross domestic product (GDP) growth rate to foreign exchange reserves, fiscal deficit, rupee-dollar parity and the flow of credit to the private sector have been showing signs of improvement.
A favourable reduction in discount rate would bring down the cost of doing business and provide some relief to the members of the business community who were already under immense pressure due to increase in gas tariff, imposition of Gas Infrastructure Development Cess (GIDC), enhanced load shedding & power failures along with poor law & order situation.
Abdullah Zaki was of the opinion that reduction in bank mark-up rate would certainly attract fresh investment, promote expansion and industrialization particularly in the textile sector, besides creating job opportunities and enhancing exports of the country.
“The State Bank of Pakistan has to realize that tighter monetary policy stance adopted in the past never yielded positive results and now, it is high time that the central bank must soften its stance in order to ensure relief to the businessmen and industrialists who are playing a major role in Pakistan’s economic progress and prosperity by continuing their businesses in extremely dire circumstances”, he added.
The businessmen and industrialists, who are constantly facing various threats due to poor law and order situation, deserve to get some relief in shape of reduction in discount rate, President KCCI emphasized.
He hoped that State Bank of Pakistan this time brings down discount rate to single digit and instead of pursuing contractionary monetary policy, the central bank must now adopt expansionary monetary policy to trigger tangible economic growth and industrialization across the country.