The Lahore Chamber of Commerce and Industry (LCCI) has described the 50-basis-point cut in benchmark policy rate as meagre and a half-hearted attempt to rejuvenate the economy and said the State Bank should bring it down to single digit.
Commenting on the interest rate cut to 10% by the State Bank of Pakistan (SBP) on Friday, LCCI President Farooq Iftikhar, in a statement, said the SBP governor should have taken a bold step and reduced the rate by at least 150 basis points. “The decrease will hardly improve the investment scenario.”
However, the slash in interest rate will bring down the cost of debt servicing for the government – the biggest borrower. According to Iftikhar, the previous reduction in interest rate in August trimmed debt-servicing for the government by over Rs40 billion. “But for the private sector, it is not very encouraging.”
Published in The Express Tribune, October 6th, 2012.
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