KCCI chief urges SBP to bring down discount rate

Karachi Chamber of Commerce and Industry's (KCCI) President Abdullah Zaki has said that to spur economic growth and industrialisation in the country, the State Bank must bring down discount rate by at least 1 per cent to 9 per cent in the forthcoming monetary policy for the next two months.
He said that the business community expected the 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, the KCCI chief said, was already under immense pressure due to increase in gas tariff, imposition of Gas Infrastructure Development Cess, enhanced loadshedding and power failures along with poor law and order situation.
He was of the opinion that reduction in bank mark-up rate would certainly attract fresh investments, promote expansion and industrialisation, particularly in the textile sector, besides creating job opportunities and enhancing exports of the country.
"The State Bank has to realise 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, deserved to get some relief in shape of reduction in discount rate, he added.
He hoped that the SBP would bring down discount rate to single digit and instead of pursuing contradictory monetary policy, the central bank must now adopt expansionary monetary policy to trigger tangible economic growth and industrialisation across the country.
Meanwhile, Lasbela Chamber of Commerce and Industry's (LCCI) President Ismail Suttar has also asked the SBP to bring down the discount rate to give a breathing space to the industry and for the revival of economic activities.
He suggested to the SBP to make a drastic cut at least by 2.5 to 3 per cent in discount rate in the ensuing monetary policy to ensure affordable financing for industrial sector.