FPCCI seeks reduction in key policy rate

KARACHI: A monetary policy survey, conducted recently prior to the State bank of Pakistan’s Monetary Policy Committee (MPC) meeting later this month, conducted by the Policy Research Unit (PRU), Policy Advisory Board, FPCCI has recommended a reduction in the policy rate by 50 to 100 basis points.

The survey results show that 84 per cent of the businessmen and researchers in the monetary policy suggest that there should be no increase in the policy rate and nearly half of them suggest a cut between 50 to 100 bps.

The policy brief issued on the occasion has noted with a sigh of relief that the core inflation in Pakistan, the most definitive indicator for setting up the policy rate for any central bank, has significantly subsided to 6.3 per cent in August 2021, compared with 6.9 per cent in July 2021.

Mian Nasser Hyatt Maggo, president of the FPCCI, has said that the policy interest rate must not be over 6 per cent and if the central bank wants to promote business activities and economic growth in the country, it should be brought down to 5 per cent.

He also pointed out that the policy interest rate in the region is 3 per cent to 4 per cent only and “we have to compete with the region”.

The FPCCI has recently established the Policy Advisory Board under the chairmanship of former federal secretary Mohammad Younus Dagha. It aims at providing research-based expert input for policy advocacy, ease of doing business initiatives and formalising the business community’s inputs on policies to various governmental departments, institutions and departments.

The Policy Advisory Board of the FPCCI aims at formalising collective opinion of the private sector for the formulation of the business-friendly policies; with an objective to foster economic growth and development.