President Lasbela Chamber of Commerce and Industry (LCCI) Yakoob H. Karim has urged State Bank of Pakistan (SBP) to announce at least 150 to 200 basis points cut in interest rate in Monetary Policy being announced on January 15, 2015 which would certainly give impetus to the economic activities in the country. He said that high markup rate was 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, he added.
He said that interest rate was an important input for the industrial sector and always influenced the cost of production. "How we can even imagine to compete the countries like Japan, Sweden and Switzerland in the international market where industry is being financed at 0 percent interest rate. He also cited the examples of Austria, Belgium, Canada, France, Germany, Greece, Hong Kong, Italy, Malaysia, Singapore, Spain, Thailand, United Kingdom and United States where interest rate is very low.
Yakoob said that the benchmark interest rate in Pakistan was last recorded at 10 percent. He said that interest rate in Pakistan averaged 12.55 percent from 1992 until 2014, reaching an all time high of 20 percent in October 1996 and a record low of 7.50 percent in November 2002. He said that the State Bank of Pakistan has to bring down the interest rate keeping in view the ground realities and strict competition in the international market. LCCI Chief 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.
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