Lahore: The Lahore Chamber of Commerce and Industry has demanded of the State Bank of Pakistan to give a helping hand to the crisis-hit industrial sector by announcing a drastic cut of at least 3 percent in the discount rate.
In a statement issued here Wednesday, LCCI President Ijaz A Mumtaz said that a notable cut of 3 percent in the discount rate by the State Bank of Pakistan would give a big relief to the industrial sector which was feeling heat due to various internal and external challenges.
LCCI President said that SBP positive initiative would also make the Pakistani products competitive in the international markets as fluctuation in discount rates controls the industrial input cost.
He said that this fact should be an eye opener for the policy makers that Japan, Sweden and Switzerland are aiding their industrial sector at 0% discount rate as compared to Pakistan.
Ijaz A. Mumtaz said that State Bank of Pakistan has to bring down the interest rates keeping in view the ground realities and strict competition in the international market. He said that a cut of 50 to 100 basis points would not be doing any service to the challenged economy.
LCCI President said that ongoing economic scenario shows that there is hardly any time left for economic managers of the country and they all should understand well that a 50 to 100 basis point cut will be too little.
He said that it was very unfortunate that we have failed to learn any lesson from the tighter monetary policy stance adopted by the State bank of Pakistan in the yester years.
He said that it is now before all of us that high discount 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.
Ijaz A. Mumtaz said that the State Bank of Pakistan should understand that its continued tighter stance is inflicting a very heavy loss on the nation as the economy has already paid a very high price because of high interest rate.
He urged the State Bank of Pakistan to announce at least 300-basic points cut in discount rate that would certainly give jumpstart to the economic activities in the country.