KARACHI: While the industrialists continued to vent their anger over the central bank’s decision to raise the interest rate by 250 basis points to 12.25 per cent, they also rejected the move to hike interest rates for financing under the Export Finance Scheme (EFS) by 2.5pc.
Employers Federation of Pakistan (EFP) president Ismail Suttur said if such actions subsist, the business community is bound to see another setback in terms of exports. The so-called solution to the problem is actually adding fuel to the fire by spiking up prices of cost of goods sold for the business community and hence contributing to an increase in prices for the average everyday individual, eventually pushing the local businessmen out of foreign markets.
He said the abrupt and unstable decision to increase the interest rate has led Pakistan to become one of the most inflated countries in the region, since the start of 2022. Interest rates in corresponding countries such as India, Bangladesh, Sri Lanka and Bhutan are still in a range of four to 7.16 per cent. On the other hand, Pakistan is experiencing socio-economic instability to a large extent driven to sudden rash decisions in the name of stability, he added.
President of the Korangi Association of Trade and Industry (Kati) Salman Aslam said the hike in interest rate by 2.5pc would cause irreparable damage to the economy.
With already rising cost of production, it would be very difficult to compete with regional countries after increase in the interest rate which may also affect export orders, he said.
Chairman of the Businessmen Group Zubair Motiwala criticised the increase in the interest rate and urged the SBP governor to immediately revisit this decision as it would prove disastrous for the economy, exports and industries.
Published in Dawn, April 9th, 2022