Zaki said the business community expects a cut as all key economic indicators, ranging from the gross domestic product (GDP) growth rate to foreign exchange reserves, fiscal deficit, rupee-dollar parity and the flow of credit to the private sector have been showing signs of improvement, a KCCI statement on Wednesday said.
A favorable reduction in discount rate would bring down the cost of doing business and provide some relief to the business community. This will come at a time when the industry is under immense pressure due to increase in gas tariff, imposition of gas infrastructure development cess (GIDC), enhanced load-shedding along with poor law and order situation.
Zaki was of the opinion that the reduction in bank mark-up rate would attract fresh investment, promote expansion and industrialisation particularly in the textile sector, besides creating job opportunities and enhancing exports of the country.
“The SBP has to realise that a tighter monetary policy stance adopted in the past has never yielded positive results — it is high time that the central bank must relax its policy,” he added.
Businessmen and industrialists, who are constantly facing various threats due to the disintegrating law and order situation, deserve to get some relief in the shape of reduction in discount rate, he stressed.
He hoped that the central bank brings down discount rate to single digit and instead of pursuing a contractionary monetary policy; it must now adopt an expansionary monetary policy to trigger tangible economic growth and industrialisation across the country.
Published in The Express Tribune, July 10th, 2014.
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