KARACHI: Business leaders have supported the central bank’s decision to reduce discount rate by 100 basis points, saying that cheaper credit will induce private investment.

The fourth consecutive cut by the State Bank of Pakistan, they said, indicates that the government is serious to improve business environment.

Federation of Pakistan Chambers of Commerce and Industries (FPCCI) President Mian Muhammad Adrees said that lower cost of credit will revive confidence of the private sector on the government.

“Consistency in economic policies is a key for achieving robust growth,” he said. “The FPCCI has been telling the government that without 7pc GDP growth rate, issues of poverty and unemployment cannot be tackled. Similarly, law and order situation cannot be improved without providing jobs to the youth.”

Lasbela Chamber of Commerce and Industry (LCCI) President Yakoob H. Karim said that the interest rate reduction would provide some oxygen to the industrial sector and help revive sick industrial units.

As a result of prudent and consistent government policies, he said, the current account deficit has narrowed down, average annual inflation is significantly below the target and there is a marginal rise in real GDP growth.

He urged the SBP governor to also reduce the rate of Export Refinance Scheme by another 100 basis points so that export-oriented industry could become competitive in the world market.

Published in Dawn, May 24th, 2015

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