The Federation of Pakistan Chambers of Commerce & Industry (FPCCI) has rejected the decision made by the State Bank of Pakistan’s (SBP) Monetary Policy Committee (MPC) to increase the key policy rate by 0.5 percent.
Saquib Fayyaz Magoon, Senior Vice President (SVP) of FPCCI, on Tuesday highlighted the disproportionate impact of this decision on small and medium enterprises (SMEs), as this decision will essentially shut the door on affordable access to finance for SMEs.
Saquib Fayyaz Magoon continued that, coupled with exorbitant energy tariffs and heavy compliance costs, this monetary tightening will push many manufacturers toward default or complete closures.
The FPCCCI SVP said that high interest rates are forcing businesses to limit their activities. He appealed the government to bring the interest at single digit.
He said that loans for trade and industry should be made affordable and the cost of borrowing in Pakistan is higher compared to regional countries.
Saqib Fayyaz Magoon said that increasing industrial production and investment is difficult without a reduction in interest rates.
He said effective consultation with the business community should take place before formulating economic policies.
The federal government and the State Bank should adopt a business-friendly monetary policy.
