Businessmen warn Central Bank of another hike in key policy rate

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ISLAMABAD,   (Parliament Times) :   The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has warned the Central Bank of any aggressive jump in the key policy rate in the upcoming Monetary Policy, as the recent stock market crash is the outcome of government’s wrong economic policies.
The stock market investors were stuck in a selling frenzy over economic fallout from country’s record trade deficit and the fear of another discount rate hike, observed FPCCI’s Businessmen Panel Chairman MianAnjumNisar.
Demanding competitive interest rate at regional countries’ level, he said that the SBP’s stance of keeping monetary policy rate at 7% was already high compared to the markup rate of China, India and Bangladesh. Yet, the central bank jacked up the key policy rate by another 150 basis points to 8.75% in last monetary policy, leading to the crash of stock market, which will remain bearish until announcement of next Policy announcement.
The hike in the interest rate by 125 basis points by the State Bank during the auction of T-bills has increased investors’ problems. In addition, there is a fear of further hike in the interest rate in the monetary policy announcement on 14th of Dec because of which there is constantly selling pressure in the market, he added.He said that expectation of further monetary tightening and an expected all-time high current account deficit had sparked panic selling across the board, leading to the capital market’s massive tragedy.