KARACHI, Nov. 11: SBP Governor Dr Shamshad Akhtar held consultations with the business leaders on Tuesday amidst reports that the government’s negotiations with the IMF are entering a decisive phase.

Leaders of all chambers and leading export associations of the country have been invited again on Thursday,” Anjum Ibrahim, the president of Karachi Chamber of Commerce and Industry informed Dawn on telephone after attending the meeting at the SBP auditorium.

The KCCI president opposed any increase in discount rate as the raise made on three occasions since January this year has neither controlled inflation nor was able to stabilise exchange parity of rupee with dollar.

Anjum’s submission was that the industrialists did not protest on these increases in discount rate on the hope that it would serve its purpose. “What we see now is uncontrolled inflation and an unending downward slide in rupee value against dollar,’’ he said.

He stressed for a quick review of monetary policy declaring in no uncertain words that the present discount rate is, too, telling on the business, which has caused closures on a wide scale and may further hit hard to halt the industry.

He quoted media reports with regard to government’s negotiations with the International Monetary Fund (IMF) and apprehended that a further rise in discount rate is being pushed on IMF’s behest.

“My fear is that the State Bank governor is not only pushing up discount rate but is also considering to increase rate of export refinance, which is now being given at 7.5 per cent,’’ a top textile exporter said. Leather exporters want a separate low rate for refinance on ultimate and highest value-added products.

Deliberate leaks in media suggest that IMF wants the Pakistan government to raise discount rate by 200 basic points—from existing 13 per cent to 15 per cent.

Any further increase in discount rate by the SBP will facilitate the government to meet another IMF condition after having already withdrawn subsidy on gas, the business circles said. An attempt to raise electricity tariff by 31 per cent had to be suspended because of a strong backlash from the industrial and domestic consumers.

Businessmen are now in informal consultation among themselves to draw up a strategy for countering a situation that will emerge after further increase in discount rate. “An inevitable outcome of a further increase in discount rate would a rise in KIBOR beyond 15.5 per cent, bank loans rate to 20 per cent plus,’’ a leader of FPCCI said, who fears piling up of bank loan defaults of over Rs600 billion and closure of the industry.’’