KARACHI – Dr. Mirza Ikhtiar Baig Senior Vice President FPCCI & Convener standing committee on banking, credit & finance expressed serious concern of the apex body on increase of SBP policy rate to 13.2% resulting bank lending rates to 15% to 16% discouraging new investments and job creation in the country, at an interactive session with Governor SBP Dr. Reza Baqir and his team at Federation House.
The session was attended by presidents of the banks, leading exporters and prominent businessmen. Dr. Baig is also has taken up the matter of the massive devaluation of Pak rupee of more than 50% in the last two years and about 30% during the last one year with no provision for hedging of imports.
He highlighted a high fiscal deficit of record 8.9% as on June 2019 as against the target of 4.9% which is worrisome. He said Federation don’t agree with SBP strategy to contain inflation by jacking up discount rates and SBP measures have slow down the economy.
Governor SBP while responding to the number of issues raised by industry leaders said SBP focusing on three major areas; exchange rate, foreign currency reserves & interest rates.
He said the previous government used the exchange rate as a shock observer for the economy and artificially keeping high rupee value which has resulted in higher outflows.
He said there is a significant reduction in current a/c deficit. Regarding the high lending rate of the banks, he said our real interest rate i.e. the difference between SBP policy rate and inflation is nominal and is not the cause to discourage investment.
SBP is already providing concessional lending rates to investors and exporters and we should focus on reducing the cost of production and ease of doing business to attract new investment.
Also spoke on the occasion, President FPCCI Engr Daroo Khan Achakzai, S.M.Muneer, Zubair Tufail, Khalid Tawab & VPs FPCCI highlighting issues of the business community.
SBP was represented by Ashraf Khan MD PBS, Executive Directors Samar Husnain, Dr. Saeed Ahmed, Arshad Mehmood Bhatti, Ali Chaudhry, Aamir Ali President Bank Islami, Bashir Shamsi President JS Bank, Saeed Tariq President Sindh Bank, Irfan Siddiqui President Meezan Bank, Junaid Ahmed President Dubai Islamic Bank Shahid Sattar President Samba Bank, Naushaba Shahzad President First Women Bank & senior executives.
