Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Tuesday rejected the policy rate at 21 percent and termed it will lead the economy toward collapse.
The President of FPCCI, Irfan Iqbal Sheikh, has stated that the entire business, industry, and trade community of Pakistan has refused to accept this policy rate, and that no commercial bank will lend to the private sector for anything less than 23.5 to 24 percent.
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Sheikh also questioned the efficacy of the country’s monetary policy, noting that the interest rate has been increased by a whopping 11.25 percent in the last 14 months without attaining any intended headway in the curtailment of inflation.
The FPCCI Chief has highlighted that Pakistan’s economic growth in FY23 has been projected at only 0.6 percent in the Asian Development Bank’s latest release pertaining to the country’s state of the economy.
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This bleak economic outlook is the direct outcome of the contractionary, regressive, IMF-dictated, and recessionary monetary policy, which has dried out access to finance for businesses.
The FPCCI is also concerned about the decline in exports, particularly in the textile and IT & ITeS industries, which have declined by 11 percent and 3 percent, respectively.
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The FPCCI’s Policy Advisory Board has reiterated its stance that Pakistan’s current policy rate of 21 percent is well above regional countries, including China, India, and Bangladesh, for which the policy rates are 2.75 percent, 6.5 percent, and 6 percent, respectively. Despite progressive and major hikes in the policy rates, inflation has remained stubbornly high and further surged, indicating an utter failure of the monetary policy.
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