The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has demanded an immediate rate cut of 500 basis points to alleviate the burden on businesses and consumers.
- Government urged to rationalize electricity tariffs
- Business community demands transparency in economic policymaking
Karachi: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has urged the State Bank of Pakistan (SBP) to implement a significant reduction in the policy rate during the upcoming Monetary Policy Committee (MPC) meeting on Monday.
Atif Ikram Sheikh, President of FPCCI, expressed deep concern over the current monetary policy, which he believes is excessively stringent and detrimental to the country’s economic growth. The current policy rate of 17.5% is significantly higher than the core inflation rate of 6.9%, leading to a substantial premium of 1060 basis points.
Sheikh emphasized the need for a 500 basis point rate cut to align the monetary policy with the government’s economic growth and exports vision. He highlighted that the declining international oil prices and the expected reduction in Saudi Arabia’s crude oil prices for Asia in December provide a favorable opportunity for a substantial rate reduction.
Saquib Fayyaz Magoon, Senior Vice President of FPCCI, proposed lowering the interest rate to 12.5% to enhance the competitiveness of Pakistani exporters in regional and international markets. He also called for the government to rationalize electricity tariffs for the industry and renegotiate Independent Power Producers (IPPs) power purchase agreements to alleviate the burden of capacity charges on businesses and consumers.
The FPCCI has repeatedly urged the government to adopt a more transparent and consultative approach to economic policymaking. The apex body has requested clarity on the government’s plans to adhere to the IMF program and revive economic growth while minimizing the impact on businesses and consumers.