LAHORE: The Lahore Chamber of Commerce and Industry has commended the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) for its decision to reduce the key policy rate by 150 basis points (bps), bringing it down to 20.5%, effective from June 11, 2024.

In a statement, LCCI President Kashif Anwar, Senior Vice President Zafar Mehmood Chaudhry, and Vice President Adnan Khalid Butt highlighted this move as a positive step towards economic improvement. They underscored the potential of this reduction to mitigate inflationary pressures, particularly as inflation rates show signs of decline.

The LCCI office bearers stressed the importance of further reducing the interest rate to single digits, and said that it will significantly impact on the cost of doing business. They emphasized that reducing policy rate to single digit would encourage the circulation of funds currently parked in banks and will speed up the economic activity and growth.

Additionally, the LCCI office bearers stressed the importance of looking at the bigger picture. They mentioned that while reducing the interest rate is helpful, it’s also crucial to deal with other economic issues. They talked about the need to lower electricity and gas prices, as well as to stabilize the exchange rate and rupee devaluation. These steps are important to make sure that lowering the interest rate really works well for the economy.

They said that it is important for the much-needed new investment in the industrial sector, adding that a noteworthy cut in the policy rate would help the industrial sector to keep the wheels of industry rolling. The LCCI office-bearers said a reduction in the policy rate would benefit the industrial sector in many ways - it would reduce production cost and bring required competitiveness to Pakistani products in comparison with the international market. LCCI office bearers urged the government to take a comprehensive approach to ensure long-lasting economic growth.

Copyright Business Recorder, 2024