LAHORE: Friends of Economic and Business Reforms (FEBR) Kashif Anwar has said that the hefty hike in policy rate of 125 basis points will further prove lethal for the economic health of the country for the cost of doing business and inflation will touch another peak disabling the local trade and industry to vie both home and abroad.
Talking with media persons, the FEBR president said that high cost of energy, shortage of gas and rupee devaluation have already been hindering the economic development and this hike of 125bps in the interest rate would prove another blow to the economy.
Obviously the government is willing to enhance reserve money with people and tackle trade deficit, he said, adding that there are some other ways including implementation of the upcoming national solar energy policy likely to be announced by Prime Minister Mian Shahbaz Sharif.
The decision of introduction of national solar policy is commendable, he said, recalling that FEBR has long been advocating the use of solar energy on national levels.
In this regard soft loans to the people interested in solar energy production should extended so that they may be able to produce as much energy as they can be able to meet not only their own requirements but also sell the energy to the government on cheaper rates, saving huge important forex reserves to built up reserve stocks and cope with trade deficit.
He also suggested that the money which is hidden and undeclared by the people in home and other places should be allowed to invest their money in the circulation on easy terms enabling them to whiten their money.
Encouraging such money holder will curtail the dependence on the IMF, he believed.
He went on saying that the government should also announce control-float of dollar so that the hidden dollar reserves may be brought out by the hoarders.
Currently, the government for sure should announce that the dollar would be brought to Rs 160 to 175, there must be an immediate influx of the dollars in to the market, strengthening the dollar value, ending the chaos like situation.
The decision of raising policy rate at this crucial time needs to be revised to make the local industry competitive in the region, said, adding, the industry ha already been operating at a 20 to 25 percent margin and if the lending cost of banks would be 20pc after including their margin in policy rate, how it would be possible for industries to operate in tough conditions.
The SBP should cut policy rates to spur growth, as a cut would infuse confidence in the business community and put it on the right track, he concluded.
