MULTAN: The Multan Chamber of Commerce and Industry (MCCI) has voiced disappointment over the recent 2 percent reduction in the policy rate, terming it insufficient and delayed. MCCI President Mian Rashid Iqbal, while commenting on the move, noted that the 200 basis point cut does not adequately address the prevailing economic conditions.
He highlighted that core inflation for September 2024 is projected to be around 7%, based on market estimates. Additionally, global oil prices have dropped to a three-year low, with crude now trading below $70 per barrel.
Mian Rashid Iqbal remarked that the business community had been expecting a more significant reduction in interest rates. However, the State Bank of Pakistan (SBP) continues to pursue what he described as an “unrealistic” and “inappropriate” monetary policy, disconnected from ground realities. He pointed out that financing challenges remain a significant barrier for businesses, making Pakistan’s exports less competitive in international markets.
He stressed that the only practical path to economic recovery lies in supporting the industrial sector and exports. MCCI called on the SBP to shift its focus from general inflation to core inflation when formulating monetary policy.
Furthermore, Mian Rashid Iqbal urged the government to take decisive steps against hoarding, price manipulation, and other market malpractices to bring inflation under control. He noted that during 2022 and 2023, the policy rate was raised from 9.75% to 22%, which further fueled inflation.
He argued that it is now time to realign monetary policy with the realities on the ground and called for an immediate reduction of the interest rate to 12%. This, he said, would help reduce the cost of capital, enabling Pakistani exporters to compete effectively in regional and global markets.
The MCCI president also emphasized the need for the government to fulfill its commitment to rationalize electricity tariffs for industries, which, he added, requires renegotiation of contracts with Independent Power Producers (IPPs).
