Trade bodies hit out at monetary policy stance

By Muhammad Toori

KARACHI: Trade bodies have criticised the monetary policy announced by the central bank and termed it against the industrial growth.
"We take it as an unfortunate decision as there is no justification for keeping the policy rate unchanged," said Federation of Pakistan Chambers of Commerce and Industries (FPCCI) president Sultan Chawla following the monetary policy announcement.
He added, "Controlling inflation through the tool of the policy rate has historically been a useless exercise which, thus far, just added to the miseries of people in general and industrialists in particular. I am sure that it will not do any good in future as well…It will only push the cost of doing business higher."
Traders are of the view that the central bank should rather control money supply by other home-made fiscal disciplines and should match the growth in money supply with real growth in the economy.
Another trader pointed out that the act of controlling money supply through discount rate is a failed strategy as far as the national economy is concerned. "We are facing supply shortages but when the central bank creates new money out of thin air, it would add to our pain," he said.
"I see no foreign direct investment (FDI) coming in with this policy and even the local investor is reluctant to invest. Our export target will definitely be out of reach and the electricity, gas and law-and-order outlook is too bleak. In this scenario, the SBP decision is disappointing," said Anjum Nisar, a former president of Karachi Chamber Of commerce and Industry (KCCI).