Karachi (PR): Zubair Ahmed Malik, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has shown his concern over the upward revision in the interest rates by 50 basis points as announced by the Governor SBP in the present Monetary Policy Statement. Through his earlier statement of 4th September 2013 president FPCCI has apprehended for such move of the SBP.

It should be remembered that in his earlier statement of 4th September 2013 Zubair A. Malik has apprehended for such move of the SBP. According to section 16 of Para B        ( Monetary and Exchange rate policies of the Memorandum of Economic and Financial policies signed by Finance Minister and SBP Governor with the International Monetary Funds (IMF), to address declining reserves and a projected rebound in inflation, the SBP will adjust monetary and exchange rate policies. Though the Memorandum with IMF covers monetary and fiscal policies, taxations, and trade policy, however, private sector has not been consulted before signing and finalization of the document.

Though Governor SBP officially declared a significant reduction in the bank borrowing by private sector but despite of this fact he announced an increase in interest rate. FPCCI is seriously concern with significant decline in private sector lending from commercial banks.

The Governor SBP has admitted in his statement that Private sector is reluctant to borrow from commercial banks due to energy crises and deteriorating law & order situation, while Government has borrowed Rs.547 billion from banks to finance its deficit during two and half months. The lack of borrowing by private sector indicates the sever problem in industrialization and investment process. It reflects also the lack of investor’s confidence and de-industrialization in the country which is a cause of growing unemployment.