The State Bank of Pakistan (SBP) has only reduced its policy rate by 50 basis points. Business Community was expecting hefty cut in discount rate in new monetary policy in line with international trend.

Only 0.5 percent reduction in interest rate has greatly disappointed the business community, as it would not provide any benefit to them. Mahfooz Elahi, President, Islamabad Chamber of Commerce & Industry (ICCI) expressing his views, during a meeting with business leaders at Chamber house.

ICCI President said that the new monetary policy was not an expansionary policy rather it is the continuation of the contractionary monetary policies adopted by the SBP for the last three years, which proved seriously damaging for the business activities.

To control the damaging effects of current recession on the employment and investment, Government should have announced an expansionary policy so that with the expansion and growth of business and industrial activities, problems of unemployment and poverty could be tackled, he maintained.

ICCI President said that power shortages have emerged as one of the most critical factors hampering economic activity in the country. There was a dire need of immense cut in interest rate to create some room for improving the chances of economic recovery and to remove systemic risks for the financial sector as well, he opinioned.

He said that the government had declared year 2010 as the Year of Industrial Revival but no relief was provided to ailing industry. SPB should take measures to stop this trend and come up with concrete policies to support SMEs and industries, he emphasized.