Lahore: The Lahore Chamber of Commerce & Industry Friday termed 50basis point cut in markup as meagre and half-hearted attempt to rejuvenate economy as the business wants of the State Bank to bring it to 8 percent.
In a statement issued here, the LCCI President Farooq Iftikhar said that the SBP Governor should have taken some bold steps and curtailed it to at least 150 basis points. “The decrease will hardly improve the local investment scenario.” For government, it means decrease in debt-servicing costs as it is the biggest borrower. The slash in interest rate in August last trimmed the government debt-servicing by over Rs 40 billion. But for the private sector it is not very encouraging.
The availability of cheaper liquidity to the business community is need of the hour as the SBP tight monetary mantra in the name of financial discipline had already caused irreparable dent to the private sector growth and brought in an unusual surge in unemployment. “Neither any industrial expansion took place nor any investor put money in any new business venture. And one of the reasons was unavailability of cheaper money to the private sector.”
LCCI President, meanwhile, called for measures to overcome energy crisis to make this interest rate cut meaningful and result oriented. If these factors are not taken into account, they will continue to create problems for the economy in general and for the private sector in particular.
He also 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.