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| 10 April 2005 | Sunday | 30 Safar 1426 |
SBP to increase interest rate
The rate of inflation during the current fiscal year is 8.8 per cent.
Speaking at a pre-budget conference 2005-06 “Performance, challenges, opportunities and strategies” hosted by the Institute of Cost and Management Accountants Pakistan, the SBP governor noted that the poor and fixed income group people were the worst sufferers of the inflation. “Businessmen even a ‘pan wala’ gives push to his commodity when he pays high for something.”
Now, he said, it was right time to increase the rate of interest to safeguard the interest of depositors who are mostly fixed income group people.
“The increase in interest rate would limit the credit availability and influence the cost of production of a manufacturer, but benefit the depositors whose money is used by businessmen,” he said.
“During last three years, through cutting down interest rate we tried to streamline the economy and support the manufacturing sector,” he said.
He claimed that the government through its wise economic policies had succeeded in increasing the collective income of Pakistanis.
He explained that higher inflation was a result of increased collective income and high purchasing power, and that “we would have to strengthen the supply side to counter the demand pushing the prices higher.”
“During the last 12 years, the economy was stagnant and therefore supply side is week that calls for serious and calculated efforts.”
He appealed to the professionals to analyze the facts and present a real picture about the inflation in the country.—APP
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