Business community here on Tuesday, while opposing an increase of 150 basis points to 13.75 percent in its benchmark policy rate by State Bank of Pakistan, has said that the decision will prove detrimental to the country’s economy.
Businessmen demanded a deeper cut in policy rate to support an ailing economy and flourish businesses and industrial growth.
The objection was raised during a joint meeting of traders and industrialists, chaired by President Sarhad Chamber of Commerce and Industry (SCCI) Hasnain Khurshid Ahmad here at the Chamber’s House on Tuesday.
The sitting was attended by the chamber office bearers Imran Khan Mohmand and Javed Akhtar, traders and industrialists in a large number.
The business community urged the prime minister and minister for finance to take notice and reduce interest rate at an optimal level.
The SBP has previously increased policy rate by 2.5 per cent, while yesterday’s further increase of 1.5 per cent announced by the central bank, which is the highest markup rate in Pakistan that would enhance cost of industrial production and create difficulties in businesses and trade activities, Hasnain Khurshid told the meeting.
The chamber’s president categorically rejected the recent hike in policy rate, as it is unaffordable for the country’s economy, businesses and industrialists, asked that the decision should be immediately withdrawn.
He continued to say that the hike would bring a new wave of inflation in the country, and would also negatively impact the country’s exports.
The SCCI chief observed the country’s economy is already reeling, warning that the economy would be completely destroyed after the SBP’s decision to increase the policy rate.
He added the current statistical figures are indicating negative growth and further deteriorating in coming days.
Economy has brought on the brink of complete collapse amid gradual strengthening of the dollar against Pakistan rupee, Mr Khurshid noticed.
He attributed that drastic reduction in foreign exchange reserves, exports, trade deficit along with gas and energy crisis as result of inconsistency in economic policies and whopping foreign debts.
The chamber’s president called for revisiting economic policies. He emphasized it is essential in the prevailing scenario that policies should be made independently to pull out the country from mired of foreign loans
Hasnain Khurshid said the economy of the country is also facing recession and in the prevailing circumstances increase in interest rate will affect industrial and commercial activities.
The SCCI chief said in the present scenario, the country’s economy needs support and every decision should be taken with due care and consideration.
He requested the Acting Governor SBP, Dr. Murtaza Syed to take back the decision of increase in interest rate in order unhurt trade and commercial activities in the country.
