Businessmen demand further rate cut

LCCI chief says SBP should reconsider decision to maintain policy rate

LAHORE:

Lahore Chamber of Commerce and Industry (LCCI) President Irfan Iqbal Sheikh on Tuesday said the State Bank of Pakistan (SBP) should reconsider its decision to maintain the policy rate at 7%.

In a statement, the LCCI president along with Senior Vice President Ali Hussam Asghar and Vice President Mian Zahid Jawaid Ahmed said due to Covid-19 the business community, especially small and medium enterprises (SMEs), had expected the central bank to further reduce the policy rate to provide breathing space to the industrial sector, which was already struggling.

“It is important for the much-needed new investment in the industrial sector,” they said, adding that a noteworthy cut in the policy rate would help the industrial sector to keep the wheels of industry rolling. The LCCI office-bearers said a reduction in the policy rate would benefit the industrial sector in many ways - it would reduce production cost and bring required competitiveness to Pakistani products in comparison with the international market.

They said even before the spread of coronavirus, countries like Switzerland, Denmark and Japan were aiding their industrial sectors with lowest interest rates and had maintained the policy rate at the lowest in the last many years.

The LCCI office-bearers said due to Covid-19 the business community was facing multiple issues like cash flow, capacity generation, exports, etc.

Published in The Express Tribune, September 23^rd, 2020.

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