The Lahore Chamber of Commerce and Industry (LCCI) on Friday criticised the imposition of 35 percent margin on letter of credit and hike in the interest rate saying that these steps would prove a big blow to the already crippled economy of the country.
In a strong-worded statement issued here, the LCCI Acting President, Shafqat Saeed Piracha said that the raise in L/C margin from zero to 35 percent and increase in interest rate would bring disaster to the whole industrial sector which is already in deep crisis owing to multiple reasons including shortage of power, energy and highest-ever oil prices in the world market.
Piracha, who looked disturbed over SBP Governor steps, said that this is not the way of handling things, it seems the SBP Governor is unaware of the fact that this single step would ruin the whole industrial sector.
He said it had been wiser if the SBP Governor would have announced the imposition of 35 percent L/C margin for luxury items and a certain class of food items which are not essential including imported beverages, confectionery goods, cell phones and vehicles.
Piracha said the imposition of L/C margin on industrial raw materials is an illogical and ill-conceived idea, which would defame the present regime to the extent. He said that the decision would not only raise the graph of unemployment but also force the industrial workers to take the streets. He said that instead of controlling the inflation, these measures would multiply the financial woes of the industrial sector.
Piracha said that the hike in interest rate would further increase the cost of production in Pakistan leaving its merchandise uncompetitive in the global market.
He said the industrial growth was already on the decline and was on the lowest-ever level at less than four percent while the GDP growth is also likely to remain below the target and in these circumstances such steps would not only bring a new wave of price-hike but would dent the exports of the country also.
He said that instead of banning import on TT, the SBP has imposed 35 percent margin on Letter of Credit. He added that the SBP should take immediate measures to ban imports on TT through which precious foreign exchange is fast shifting abroad.
Piracha said this is highly condemnable that the SBP Governor announced the monetary measures at such a time when the country was passing through the most critical time of its history. On the one hand, the issue of judges was taking its toll while on the other all the economic indicators are painting a negative picture, he added.
He urged the Prime Minister, Yousuf Raza Gilani and Finance Minister, Naveed Qamar to intervene into the matter immediately in the larger interests of the economy of the country.