FPCCI hails reduction in key policy rate, urges further cut

Apex body president asks central bank to restrict banks to adjust KIBOR monthly to pass on relief to businesses

The Federation of Pakistan Chambers of Commerce and industry (FPCCI) president Mian Anjum Nisar on Friday hailed the central bank to reduce discount rate by 100 basis points to 7% in an unscheduled meeting of Monetary Policy Committee which has so far dropped the key interest rate by 6.25% from 13.25% since March 17, 2020.

He said the rate slash is a welcome move, but only 100bps (basis points) reduction is not enough. In the prevailing circumstances, interest rate at 7 percent is not feasible for the businesses, he said. “FPCCI hopes the central bank will consider the plights of the business community and rates would be brought to 5 percent soon,” he added. He said that the businessmen’s apex body welcomes the central bank’s move to cut the interest rates by 1 percent, urging it to bring discount rate to at least 5 percent in line with global financial trend. “This is commendable step of the State Bank, as it has now started shifting toward supporting trade and industrial growth and employment generation which is not possible without sizeable cut in key policy rate,” he added. He said that the banks should now also be advised to follow the lines of SBP immediately accordingly.