LCCI hails 100 basis points cut in discount rate

Sameer Nazir
KARACHI:
Trade and industry has appreciated the central bank’s decision to reduce discount rate by 100 basis points.
The President Lasbela Chamber of Commerce and Industry (LCCI), Yakoob H Karim said while welcoming the reduction in discount rate announced in the Monetary Policy by the Governor State Bank of Pakistan (SBP) on Saturday, said that the reduction in 100 basis points would provide some oxygen to the industrial sector and of course prove to be the savior of dying industrial units due to some sigh of relief.
He said that industry may take a U-turn towards revival of sick-units due to relief in industrial loans.
He agreed to the SBP’s claims that macroeconomic conditions towards the end of FY15 have further improved compared to the beginning of the fiscal year. Current account deficit has narrowed down; average annual inflation is significantly below the target; there is a marginal uptick in real GDP growth; and foreign exchange reserve buildup continued.
He said that all such developments were reflected in the recent upgrades in outlook by international rating agencies that may improve investor’s confidence. He demanded of the SBP’s Governor to also reduce 100 basis points in Export Refinance Scheme so that export oriented industries could also taker a sigh of relief. He said that SBP’s policy to lower interest rate should continue in future as well.