ICCI for reducing interest rate to single digit for reviving business activities


The Islamabad Chamber of Commerce & Industry has called upon the government to bring down the key interest rate to single digit level for reviving business activities as due to high interest rate, production cost and cost of doing business has increased manifold causing drastic slowdown in business activities and halt in new investment.
Ahmed Hassan Moughal President, RafatFarid Senior Vice President and Iftikhar Anwar Sethi Vice President, Islamabad Chamber of Commerce & Industry in a statement said that businessmen needed borrowings from banks to expand existing businesses and invest in new start-ups, but policy rate of 13.25 percent has made bank borrowing very costly for them due to which they were facing problems in promoting business activities.
Ahmed Hassan Moughal said that whenever interest rate went up, banks preferred to invest in government securities instead of providing credit to private sector and the same was happening right now in Pakistan. He further said that the current government also financed the bulk of fiscal deficit through borrowings from the central bank due to which inflation shot up and government adopted atight monetary policy throughout the year to check inflationary pressures. But this approach crowded out the private sector from the credit facility. Due to this factor, the performance of all major industries during 2018-19 including food, beverages, petroleum, pharmaceuticals, chemicals and automobiles remained in negative while the growth of SMEs also suffered badly.