Karachi, July 28, 2014 (PPI-OT): Mr. Shaukat Ahmed, Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed his serious concern over presently announced monetary policy statement of the State Bank of Pakistan. He said that to keep policy rate unchanged is not a policy it is escapism and avoiding from taking necessary measures.
He said that the there was enough space to reduce interest rate as government is claiming drastic decline in the inflation in the country. SBP has lost the opportunity to facilitate industry through significant reduction in the interest rate.
Mr. Shaukat Ahmed informed that according to a report release by Fraser Institute on economic freedom Pakistan Ranks at 102 out of 152 countries in money market regulations. Interest rate control is the weakest area in Pakistan. It is surprising that deteriorating in these indicators was observed since 2000. Credit market regulations and credit to private sector are other weakest areas in Pakistan monetary system. These indicators reflect the problem of business sector in Pakistan.
He further said that in the worldwide regime of liberalization, it is astonishing factor that monetary system in Pakistan is making business sector uncompetitive.
Acting President Mr. Shaukat Ahmed said that world is following expansionary monetary policies to boost the economic growth by enhancing manufacturing activities to promote employment. He informed that interest rate in USA is 0.23, China 4.7, Japan 0.13, France 0.21, Germany 0.21 India 8.6, Malaysia 3.36 while interest rate in Pakistan is 10.2 percent which is significantly high and does not support industrial sector. Almost all economies of the world have reduced interest rate to ease the economy of the country. But State Bank of Pakistan is continuously using the tool of tight monetary policy in the name of control over inflation.
Mr. Shaukat Ahmed Acting President said that instead of giving signals of high interest rate and increasing cost of business SBP should device policy to shift and encourage the credit to private sector. The trend of financing deficit by using commercial banks deposits should be stopped and public money should be utilized to generate and boost economic activities in private sector.
For more information, contact:
M. A. Lodhi
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