ICCI resents increase in key policy interest rate to 13.25pc

ISLAMABAD: Increasing key policy rate to 13.25 percent had created lot of difficulties for the private sector and business community was expecting decent cut in interest rate in SBP new monetary policy, but government has disappointed the businessmen by maintaining policy rate at same level for the next two months.

This was observed by Ahmed Hassan Moughal, President, Islamabad Chamber of Commerce & Industry while commenting on SBP’s latest monetary policy. He said that high interest rate has made credit cost very high for the private sector due to which business community was facing problems in expanding businesses and investing in new ventures.

This situation was also discouraging new investment and affecting the overall economic growth of the country. He urged that government should have reduced interest rate to provide direly needed relief to the business sector and to save the economy from further problems.

Ahmed Hassan Moughal said that at the one hand, government was giving assurances to promote ease of doing business, but at the other hand, it was taking decisions that were creating more difficulties for the private sector. He said that the economy of Pakistan was passing through a difficult period and government should have made significant cut in interest rate to provide easy credit facility to private sector for expansion of businesses. However, by keeping the interest rate unchanged for the next two months, the government has lost a good opportunity to provide relief to the business sector.

Rafat Farid, Senior Vice President and Iftikhar Anwar Sethi Vice President, Islamabad Chamber of Commerce & Industry, said that with increased interest rate, banks were preferring to invest in government’s securities that were bringing them risk-free high returns. This situation has squeezed credit availability for the private sector leading to further slump in business and economic activities.

They urged that government should review its decision for maintaining the interest rate at the same level and take measures for creating an enabling environment for private sector that was the best option to facilitate the growth of business activities, encourage new investment, improve exports and steer the economy out of troubled waters.