Expert concerned at high interest rate

Economic & Financial Analyst, Ateeq Ur Rehman has said following the higher interest rate the non performing loan will continue to escalate. State Bank of Pakistan (SBP) on Friday announced to maintain the interest rate unchanged at 13.25 percent which is not a healthy sign and will bring adverse effects on the economy he said. He said that the policy makers should have pursued a proactive fiscal policy and should not have cut the interest rate in order to support the flagging economic growth.

This hike in interest rate played disastrous to the access to finance for the Business Community as a whole and for SMEs and Startups in particular. The rates and payment of car / house financing (consumer financing) will be unbearable. The cost of doing business and cost of production will continue to shoot up to the level of un-competitiveness. Also the cost of borrowing will be huge and capital financing shall remain more expensive.