SBP asked to slash key Policy Rate
ISLAMABAD: The Islamabad Chamber of Commerce and Industry (ICCI) on Friday urged the State Bank of Pakistan (SBP) to reduce mark-up rate by 150 to 200 basis points in the monetary policy scheduled to be announced on August 10.
“The decision to cut mark-up rate to single digit is essential for reviving the business activities, overcome low-growth scenario, encourage new investments which would ultimately improve the economic growth of the country,” ICCI President, Yassar Sakhi Butt said in a statement.
He was of the view that maintaining mark-up at 12 per cent by State Bank of Pakistan would further fuel the non-performing loans and unemployment in private sector.
He said that the availability of cheaper money to the business doing people is must to bring down the cost of business in Pakistan as the trade and industry were already facing huge losses on present level due to high cost of energy and its crisis in the country.
He said reduction in bank mark-up rate could encourage fresh investment in the industry which had declined to 13.4 per cent in FY11, thus reduction in mark-up rate would increase employment and exports of the country in long-term.
He was citing the example of China, where mark-up rate was 6.56 per cent, India 8 per cent, Sri Lanka 7.75 per cent and in Bangladesh 7.75 per cent against 12 per cent in Pakistan.
ICCI President said that the economic meltdown in recent years had already proved that high policy rate had caused a great harm to economy and would continue to widen the fiscal deficit.