KARACHI: The industry has welcomed the 100 basis points in discount rate announced in Monetary Policy by the State Bank of Pakistan on Saturday. The Chairman Lasbela Chamber of Commerce and Industry (LCCI), Yakoob H Karim has said that after a long time, the Governor State Bank has made a wise decision to reduce interest rate and brought the discount rate down to 8.5 per cent. H said that by virtue of this decision the industry may take some sigh of relief as reduction of one per cent interest would definitely give some breathing space to the dying industry. He said that the industry had asked the SBP to reduce 200 basis points this time but even half of that relief would be highly welcomed by the business community particularly the industry.
Yakoob said that interest rate is an important input for the industrial sector and always influences the cost of production. He said that industrial sector in Pakistan is still uncompetitive as compared to the countries like Japan, Sweden and Switzerland in the international market where industry is being financed at 0% interest rates. He also cited the examples of Austria, Belgium, Canada, France, Germany, Greece, Hong Kong, Italy, Malaysia, Singapore, Spain, Thailand, United Kingdom, United States and even India where interest rates are very low.
He said that the State Bank of Pakistan has to brought down the interest rates to 6 per cent keeping in view the ground realities and strict competition in the international market. He said that it is now before all of us that high markup rate is no more sustainable. It has been causing a great harm to economy and would continue to do so unless and until a realist approach is adopted.