Islamabad , Islamabad Chamber of Commerce and Industry (ICCI) has urged the State Bank of Pakistan to reduce markup rate by 150 to 200 basis points in the monetary policy being announced on 10 August .
ICCI President, Yassar Sakhi Butt in a statement said that the decision to cut markup 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.
He was of the view that maintaining mark-up at 12 percent 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.
ICCI President said that the heavy Government’s borrowing at the cost of the growth of private sector was hampering the growth. In such a situation the private and industrial sector should have been provided relief by SBP and policy rate should be cut up to a single digit, he added.
Yassar Sakhi Butt said that reduction in bank mark-up rate could encourage fresh investment in the industry which had declined to 13.4 percent in FY11, thus reduction in markup 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 percent, India 8 percent, Sri Lanka 7.75 percent and in Bangladesh 7.75 percent against 12 percent 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. He said that trade and Industry hoped the interest rate should have been brought down to a single digit, which was need of the day.