Lahore Chamber of Commerce and Industry calls for regionally competitive interest rates

Lahore, February 06, 2013 (PPI-OT): The Lahore Chamber of Commerce and Industry on Wednesday called for regionally competitive interest rates and urged the State Bank to bring its key policy rate down to 8 per cent to counter weak growth and revive fresh, private investment in the economy to create jobs.

In a statement issued here, the LCCI President Farooq Iftikhar, Senior Vice President Irfan Iqbal Sheikh and Vice President Mian Abuzar Shad said that the current discount rate at 9.5 per cent is still very high and discouraging investment, upgradation and product diversification plans.

The LCCI office-bearers said that the interest rate should not be higher than 8 per cent for the sake of expansion in investment activities and for creating jobs for the millions of young people entering the job market every year.

They said that availability of cheaper money is absolutely necessary for bringing down the cost of production as it is like any other industrial input. If its price is raised, the cost of production also goes up.

The LCCI office-bearers said that Pakistani goods had already lost their due place in the global market for being uncompetitive. They said that high interest rate also keeps the manufacturers from investing money in capacity expansion, in technological upgradation and product diversification therefore the SBP should bring it down so that the target set in the recently announced three-year Strategic Trade Policy Framework could be achieved.

The LCCI office-bearers said that the availability of liquidity to the business community is need of the hour as the SBP tight monetary policy in the name of financial discipline had already caused irreparable dent to the private sector growth and brought in an unusual surge in unemployment.

They said that neither any industrial expansion took place nor any investor put money in any new business venture. And one of the reasons was expensive credit cost to the private sector, keeping the industrialists on sidelines. They said that rate of interest in regional countries like Bangladesh, India and Sri Lanka is in the vicinity of 7 per cent.

For more information, contact:
Shahid Khalil
Information Department
Lahore Chamber of Commerce and Industry (LCCI)
Lahore -54000, Pakistan
Tel: +9242 111 222 499
Fax: +92 42 636 8854

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