They said that the SBP governor deserves appreciation for accepting the private sector demand that has been opposing the SBP tight monetary policy stance since long. They, however, called for measures to overcome energy crisis, security challenges and political instability. They said that if these factors are not taken into account, they would continue to create problems for the economy in general and for the private sector in particular.
They said that the cut will not only give boost to local investments because of ease in cost of doing business but foreign investors confidence will also go up and they would be willing to put their money in new ventures in Pakistan. Pakistan Readymade Garments Manufacturers & Exporters Association (Prgmea) chief coordinator Ijaz Khokhar said that the step taken by the State Bank of Pakistan would help strengthen the economic indicators.
He, however, hoped that after two months when new monetary policy would be announced, the interest rates would further be lowered to single digit.
He said that the availability of cheaper liquidity to the business community was need of the hour as in the last five years SBP tighter monetary policy stance in the name of financial discipline had failed to give any results.
LCCI President Irfan Qaiser said that perhaps the LCCI is the only chamber of commerce in the country that had termed a considerable cut in policy rate a panacea to low investment phenomenon. He said that the provision of ample cheaper liquidity is a must to create new businesses but in the last five years the higher interests kept the private sector growth at the lowest ebb causing huge damage to the businesses and unemployment graph also witnessed an unusual surge.
He urged the Governor State Bank of Pakistan to review all other economy related banking policies and facilitate the private sector that is engine of the growth. He said that in the developed economies, the markup rate is in single digit and they are maintaining it at all costs in the larger interests of their respective economies. Therefore, the Governor State Bank of Pakistan should bring it to single digit in the monetary policy to be announced after two months