KARACHI - Karachi Chamber of Commerce & Industry’s President Muhammad Haroon Agar while expressing dissatisfaction over increase of 50 basis point in discount rate by State Bank of Pakistan has stated that business community was expecting a further decrease of 50 or 100 basis points in discount rate which was also a long withstanding demand to bring the discount rate to single-digit.
He said that further increase of 50-basis points would not be fruitful to control inflation as the government was in practice to control inflation while enhancing discount rate. He stated that we firmly believe and it is our demand to drastically cut-down the discount rate to the level of 6 to 7 percent enabling the business community for level playing field with the competitors in the region.
The deteriorating law and order situation, energy crises and exorbitant increase in the POL prices has already slowed the pace of industrial and commercial activities as well as the economy while the high discount rates has also brought an upshot and increase in the cost of doing business.
The tightened monetary policy has also impeded the progress of private sector with adverse effects on the economy.
Due to increased discount rates, the non-performing loans of banks are also increasing therefore, the state of affairs demand government to take notice of the facts before taking decisions.
He opined that cut-down of discount rate to the level of 6 to 7 percent will enhance the economic and commercial activities and would also be a ray of hope motivating the abroad shifted industrial units to come back to Pakistan and also to increase the domestic and foreign investment.