Islamabad, December 15, 2012 (PPI-OT): The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has called for a further reduction in the discount rate announced by the State Bank of Pakistan, and urged for bringing the cost of borrowing down to encourage investment and revive business confidence.
Haji Fazal Kadir Khan Sherani, President of FPCCI argued that the government must take measures to facilitate investors to the maximum in the current business environment in Pakistan. The hike in utility prices along with poor law and order conditions and the severe shortage of energy have already seriously damaged the industrial competitiveness.
Compared to other countries in the Asian region, Pakistan has among the highest costs of borrowing in the world, which acts as a further deterrent to investors looking to introduce new projects which could provide employment to the workforce.
He stated that the high banking spread is the other crucial indicator in the banking system, which is hampering our industry. Banks were making profits by lending at high rates, while the interest earned on savings was very low.
On the other hand, inflation has hit the lowest level in five and a half years, supporting the business community’s demand for a cut in interest rates. However, holding the policy rate in double digits may restrict recovery in the industrial and agricultural sectors. The economy will recover at a fast pace if the State Bank eases its monetary policy to ensure lending rates which boost private sector demand for bank credit.
For more information, contact:
Syed Masood Alam Rizvi
Federation of Pakistan Chambers of Commerce and Industry (FPCCI)
B-1, Federation House, Main Clifton Road,
Tel: 0092-21-35873691, 93-94
Fax: +9221 3587 4332