The Multan Chamber of Commerce and Industry (MCCI) has rejected the central bank's monetary policy stance of 'no change' in the discount rate, forecast more problems for businesses due to the ongoing political crisis and floods in the country.
The State Bank of Pakistan kept the discount rate unchanged at 10 percent for the fifth consecutive time in its September monetary policy statement issued on Saturday. MCCI President Khawaja Muhammad Usman flayed the SBP monetary policy decision, saying the central bank, instead of providing relief to the businesses at this crucial moment, is creating hurdles in boosting economic and trade activities across the country. He said businessmen and industrialists were already confronted with the issue of persistent increase in the cost of doing business for the last few years, primarily driven by power outages, weak governance and poor law and order situation. Similarly, despite softening inflation rate, the SBP's decision to keep the cost of borrowing flat would not have a positive effect on the economy nor businesses at all, he said. The credit to the private sector remains sluggish due to the tight monetary policy stance, he added. The central bank has identified the risks of political impasse, delay in the finalisation of the fourth IMF review and the current heavy rains and floods, which have engulfed central and southern Punjab, threaten the nascent recovery in the economic activity. Khawaja Usman said: "Floods are not only damaging the agriculture sector, but the entire industrial sector, but the State Bank does not seem to facilitating the affected businessmen, which are facing losses."