Businessmen give mixed reaction over monetary policy

The business community has expressed mixed reaction over keeping interest rates unchanged at 10 per cent for the next two months in the recently-announced monetary policy by State Bank of Pakistan. They said that although they were expecting a reduction in interest rate to a single digit, maintaining it at present level for the continuity of the policy was also a good sign.
Korangi Association of Trade and Industry's (KATI) former vice chairman Shahid Jawad Qureshi appreciated the SBP for keeping discount rate unchanged, saying the continuity of the policy was good for the country and its economic development. He was, however, of the opinion that the mark-up rates were on higher side in Pakistan as compared to other countries in the world and demanded that its should be brought to a single digit in the next policy. The KCCI Member Ateeq-ur-Rehman described the monetary policy as `balanced and well-calculated'.
Lasbela Chamber of Commerce and Industry's (LCCI)President Ismail Suttar opposed the central bank's decision of keeping the monetary policy unchanged at 10pc despite the fact that country's various economic indicators had started showing signs of improvement. In a statement, he said that although exporters have suffered monetary losses in the wake of an abrupt depreciation in dollar's value, the SBP remained unmoved whereas the industry was expecting at least one pc reduction in the interest rate.
He urged the SBP to review its decision and bring down the key policy rate at least by one per cent to 9pc so as to reduce the business cost, giving some relief to the members of the business community. He also advised the government to take business community on board prior to taking such decisions having a direct impact on cost of doing business.
He added that the availability of surplus liquidity in the market was always essential as its absence was the prime reason behind lack of investment in the industry. Reduction in bank mark-up rate could encourage fresh investment in the industry, particularly in the textile and other industries. Suttar said that private sector's borrowing remains still very low as banks preferred lending to the government and a hike in the key policy rate would tantamount to punishing the masses and the private sector as they would have to pay more interest on borrowings.