UBG leaders criticise maintaining interest rate at 22pc

KARACHI: The industrial sector has criticized the central bank for maintaining the policy rate at 22 percent, saying it is unaffordable for industries and will lead to closures and new investment.

Representatives of the United Business Group (UBG) expressed disappointment, saying they had expected some cuts, which would have helped the industry, breathe a sigh of relief.

President UBG Tufail said that this policy rate is unsustainable for the industry, which may lead to closure of more industries. Zubair Tufail said that when the industries started expanding by bringing in new investment, the policy rate was 13 percent but the interest rate has been frozen at the highest level of 22 percent. Due to interest rate being 22 percent, the industrial cost has increased many times due to which Pakistan has become uncompetitive in the global market.

UBG Sindh Chairman Khalid Tawab said that the high interest rate regime has also discouraged investment in the industrial sector, which was already reeling from high energy and raw material prices due to the appreciation of the dollar against the rupee.

UBG Sindh General Secretary Hanif Gohar said that the interest rate should be between 10 percent and 12 percent to help the industry attract new investments for expansion and modernization, the current policy rate is against the facts.

Former Vice President FPCCI and Leader of the Businessman Forum, Captain Abdul Rashid Abro also expressed disappointment over the decision to maintain the policy rate, saying it was too high for the growth of the industry. He said that the interest rate in Pakistan was high as compared to the region and reducing it can help the country to export more and improve the balance of payments, single digit policy rate will help in developing the industry and economic development of the country.

Copyright Business Recorder, 2024