FPCCI hails markup rate cut, warns of currency pressure

MULTAN: The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) hailed the State Bank of Pakistan’s decision to reduce the markup rate, terming it a positive sign for a crumbling economy, and said that the reduction is likely to lead to increased business activity, more investments, potential and economic growth and help lower inflation by making borrowing cheaper for businesses and consumers. However, it might also put pressure on the currency depending on the financial context.

While the FPCCI Patron-in-Chief SM Tanveer, Regional Chairman Sindh Bilal Khan, and Chairman Special Committee for the Restoration of Cotton Industry Malik Sohail Talat welcomed the reduction of the markup rate from 15% to 13% as a positive development, they also expressed concern that a significant reduction, if not managed carefully, could lead to potential financial instability.

They called for a more significant reduction of 500 points, arguing that it would further stimulate industry and trade. The FPCCI expressed optimism about the government’s intention to reduce the markup rate to single digits in the next quarter, balancing it with inflation concerns. The association has been instrumental in addressing issues affecting the economy, notably the IPP contracts, which they successfully challenged, leading to savings of Rs. 411 billion. They are actively working on renegotiating contracts with nine more IPPs to secure cheaper electricity for consumers.

The FPCCI emphasized the critical role of the cotton industry in Pakistan’s economy. They are committed to reviving this sector by collaborating with the government to promote research and development and encourage cotton cultivation.