Karachi: Mr. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed the business community's disappointment with the current monetary policy, highlighting a significant premium on the policy rate compared to core inflation, which stands at 6.9 percent as of September 2024, against a policy rate of 17.5 percent.

According to Federation of Pakistan Chambers of Commerce and Industry, Mr. Sheikh detailed that FPCCI is advocating for an immediate reduction of 500 basis points in the upcoming monetary policy committee meeting. This adjustment is crucial to align with the government's broader economic strategies, including the Special Investment Facilitation Council and the Prime Minister’s vision for economic growth and boosting exports. The anticipated core inflation rate is set to hover around 7 percent for October 2024.

Further, Mr. Sheikh pointed out the downward trend in international oil prices and expected cuts by Saudi Arabia in crude prices for Asia in December. These developments provide a solid foundation for Pakistan to modify its "regressive, counterproductive" monetary stance. Additionally, Mr. Saquib Fayyaz Magoon, Senior Vice President of FPCCI, suggested lowering the interest rate to 12.5 percent to enhance the competitiveness of Pakistani exporters by reducing capital costs.

The FPCCI has consistently challenged the government's transparency in economic policy-making and emphasized the need for clear communication regarding the measures to comply with the new IMF program and their implications for business costs in Pakistan. FPCCI's call for action includes reassessing the electricity tariff structure for industries and renegotiating terms with independent power producers to alleviate financial burdens on industry and consumers.