KARACHI, July 28: Siraj Kassam Teli, a former president of Karachi Chamber of Commerce and Industry and a leader of Businessmen Group, has asserted that high bank interest rates have proved ineffective in controlling energy and food prices.

Rather than tackling high energy and food prices through interest rates, Teli’s suggestion is to improve energy conservation and an effective curb on smuggling of oil and food.

In a statement on Monday, a day before the State Bank governor is due to announce next monetary policy, he reminded Dr. Shamshad Akhtar that one and a half per cent annualised increase in discount rate by the SBP on May 22, resulted in 4 to 4.5 per cent increase in KIBOR and about 5 to 6 per cent in bank lending rate.

He urged the central bank to exercise a realistic approach on Tuesday when a new monetary policy for next six months is announced. He demanded that KIBOR be kept within reasonable limits to contain lending rates.

He pleaded for stability in lending rates to facilitate expansion in industrial and business activities and generate employment in the country.