FCCI calls for significant cut in policy rate

According to Business Recorder, Farooq Yousaf Sheikh, president of the Faisalabad Chamber of Commerce and Industry, has urged a sharp reduction in the policy rate ahead of the Monetary Policy Committee meeting on September 14. He argued that the economy has kept improving despite regional turbulence, and that foreign exchange reserves have risen. Cheaper borrowing, he said, would let domestic industry raise production and generate jobs.

Sheikh noted that chambers across the country have sought a cut for several years. He acknowledged that the government had already lowered the rate from 23 percent to 11.5 percent, but said it remains well above rates in regional economies. As a consequence, he added, Pakistani exporters face higher production costs and struggle to compete abroad.

Sheikh has asked the State Bank of Pakistan to reduce the rate to 5 percent. In his view, such a cut would speed up industrial and productive activity and lend further support to economic growth.