Business community terms interest rate decision ‘too little, too late’

The policy rate cut of 150 basis points by the State Bank on Monday disappointed most of the industrialists as they expected that a much bigger cut would bring the interest rate down to 15 per cent. Atif Ikram Sheikh, the FPCCI president, said the interest rate should come down to 15 per cent to enable Pakistani exporters to compete in the regional and international export markets by reducing the cost of capital. Most of the industrialists were of the view that the core inflation should be taken as a benchmark to decide the interest rate. He said the rate cut announced on Monday was “too little, too late” since the business community had hoped for a more substantial reduction. The business community deserves relief in the form of better access to finance from commercial banks, he added.