Business community in a meeting chaired by Zahid Maqbool, President, Islamabad Chamber of Commerce & Industry (ICCI) expressed its disappointment over new monetary policy which effected no cut in policy rate keeping it unchanged at 13 percent.

They termed it continuation of a contractionary monetary policy while the country was needed expansionary monetary policy for enhancing trade financing facilities and other expansionary measures to give boost to business and economic activities.

Addressing the meeting, Zahid Maqbool said business community had been expecting a significant reduction in the interest rate as it was a consensus opinion of the economists & businessmen that monetary policy should be eased to control the damaging effects of the recession on the employment, business & investment activities, but lamented that no attention was paid to such proposals while announcing new monetary policy.

He said consequent upon global recession, most of the countries had made drastic cut in interest rates to stimulate their economies while interest rate in Pakistan was still very high in the world, which was proving a big hurdle in promotion and expansion of business activities.

He said Pakistan was facing serious problems of rising unemployment and poverty, which could be reduced only by enhancing the role of private sector in the national economy. He said the best option to promote private sector’s role in economic activities was to make a hefty cut in interest rate for easy loaning facilities to businessmen.

Zahid Maqbool cautioned that stagnant private sector investment and slowdown in business activities, caused by tight monetary policy, would hurt the potential output of the economy and would create further gap in demand & supply giving sharp rise to inflation, which would spoil all government’s efforts to reduce inflation by tight monetary policy.

He also showed concern on the structure of newly formed Monetary Policy Committee. He said business community was the key stakeholder in economic development but lamented that government had not given them any representation in the newly formed Monetary Policy Committee. He demanded that private sector should be given proper representation in the monetary policy formation committee to formulate business friendly monetary policies.