LAHORE, Oct 30: The Pakistan Industrial and Traders Association Front (PITAF) has proposed immediate increase in bank markup rates to check the flight of capital to the Gulf countries.

The proposal was given by PITAF chairman Mian Abu Zar Shah at a meeting of the industrialists convened here on Saturday to discuss the effects of the fast growing flight of capital from the country.

He said increase in markup rate could provide an alternative for investment to the people transferring the capital to the Gulf for investment in real estate business.

He said the flight of capital was a cause of concern because the forex companies were transferring $15 million to $25 million abroad daily and had transferred $900 million outside the country so far. Dollar exchange rate had increased from Rs59.50 to Rs61.50 during the past few weeks due to continuing flight of capital.

He said flight of capital through forex companies was the second serious attack on the foreign exchange reserves of the country which had exceeded $12 billion as a result of good financial management by Prime Minister Shaukat Aziz. The first attack on forex reserves had come in the form of increase in POL prices from $25 to $55 a barrel.