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Margin on LC would hurt business activity, FPCCI Chairman

03
Jun '08
Chairman FPCCI standing Committee on Industry Mr. Muhammad Adrees in a press statement said that monetary policy announced by the SBP particularly to increase discount rate from 10.5% to 12.0% and 35% cash margin on LC would hurt business activity already under pressure owing to high cost of doing business and loosing competitive edge globally.

He maintained that whole of the industrial sector particularly export-oriented industries and SMEs sector would be badly hit.

The Cash margin of 35% on LCs would add to the liquidity problem for the industry in term of increased cost of raw materials and machinery / equipment owing to shoot-up in the capital cost thus further increasing the cost of production and negative impact on the national economic growth.

He continued that the industry is already heavy stress due to frequent power load-shedding and other utilities.

He stated that the SBP measures to contain inflation would cripple small and medium size industrial units already under severe financial crisis.

He maintained that the policy of 'free economy' adopted by the Government for last 8 years would hurt reciprocating into lowering our exports in foreign markets.

He said that the best way to control the inflation is to facilitate the industry for increased productivity with lower cost of production.

He concluded that all-out efforts be made to overcome the root causes and check the overall system that has been responsible for inflation rather pushing the industrial wheel to grinding halt.

Federation of Pakistan Chambers of Commerce and Industry


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