Mr. Ismail Suttar, President, Lasbela Chamber of Commerce and Industry (LCCI) has said that the new SBP Monetary Policy is shortsighted, misconceived and that it has put the question mark on the top management at State Bank of Pakistan.

Ismail says, the State Bank has announced a new refinancing scheme and hopes that a 7 percent maximum end-user rate for 10 years will reinvigorate the industrial base but with consistent market failures, this attempt is poised to reverberate with the producers and instead add to the additional carnage of the internal environment. The President LCCI opined that when export-led growth is the target the manufacturers should be the first ones to be incentivized, which otherwise could also be tackled using other innovative financial measures.

“We are talking about saving the existing industry from crisis and the State Bank thinks that new industries will be set up at 7 percent. It is the own risky bet of the SBP of putting the country in the hot money trap by going to the IMF in the first place and blatantly ignoring the plight of SMEs and business community,” Ismail said.

Further, he noticed that the Current Account Deficit is massively down, reserves just started to swell, oil prices have nose-dived [to benefit economy for about US$8 bn] and the masses are begging for fiscal support to meet their consumption needs amid a high on-average inflation rate. He proposed that keeping in view the fact that the businesses have taken the biggest revenue slump in decades with domestic markets shuttering, the SBP must redraft its monetary policy carrying interest cut as much as 3.5 to 4.00 per cent similar to one exercised by Turkey that has cut the reverse repo rate by more than expected.