PESHAWAR, Sep 16 (APP):Sarhad Chamber of Commerce and Industry (SCCI) has expressed concern over the State Bank of Pakistan’s decision of keeping policy rate at 11.5 per cent, describing the interest rate ‘status quo’ as harmful to industrial and business growth. In a press statement issued here on Wednesday, SCCI requested Central Bank to bring it down to single digits, with a target of five percent in next three months …
SCCI expresses concerns over interest rate ‘status quo’
PESHAWAR, Sep 16 (APP):Sarhad Chamber of Commerce and Industry (SCCI) has expressed concern over the State Bank of Pakistan’s decision of keeping policy rate at 11.5 per cent, describing the interest rate ‘status quo’ as harmful to industrial and business growth.
In a press statement issued here on Wednesday, SCCI requested Central Bank to bring it down to single digits, with a target of five percent in next three months to boost economic and commercial activities and economic turnaround in the country.
The chamber urged the central bank to realign its monetary policy with ground realities, warning that the current interest rate regime is strangling the economy and burdening taxpayers.
Junaid Altaf, president Muhammad Nadeem, senior vice president and Sabir Ahmad Bangash, vice president along with the entire members of the executive committee of the Sarhad Chamber of Commerce and Industry expressed disappointment over the SBPs decision.
Though, the SCCI senior office bearers acknowledged the State Bank of Pakistan commitment to maintaining macroeconomic stability and stated recent monetary policy reflects a cautious approach toward inflation management.
However, they observed Pakistan is currently experiencing cost-push inflation rather than demand-pull inflation.
Furthermore, they observed that higher fuel prices in the global market, rising transportation costs, increased electricity and gas tariffs, supply chain disruptions arising from tension in the Middle East and food price pressures were the major reasons for the rising inflation.
President Janaid Altaf urged the government to pay serious attention to reducing the impacts of rising fuel and energy costs through targeted measures, efficient energy management and improvements in supply chain.
He called for introduction of special tariff rationalization measures for the export-oriented and manufacturing sector to preserve competitiveness.
He furthermore suggested dedicated concessionary financing schemes be expanded to ensure that SMEs remain able to invest and generate employment despite prevailing economic challenges.
President Junaid Altaf stressed the need for provision of targeted incentives for KP’s industries to offset higher transportation and logistics costs arising from their geographic location.
The SCCI chief recognized the State Bank’s efforts to safeguard macroeconomic stability.
However, he said the business community believes that the current inflationary trend is primarily driven by fuel, energy and supply-side pressures rather than excessive domestic demand.
President Juanid Altaf said the business community strongly believes that Pakistan cannot achieve sustainable industrial growth by fighting supply-side inflation with demand-side instruments alone.
