It is interesting to note that the International Monetary Fund (IMF) has welcomed the Monetary Policy Committee (MPC) of the State Bank of Pakistan’s decision of raising the policy rate by 250 basis points (bps) to 12.25 percent.
Esther Perez Ruiz, IMF resident representative has been quoted as saying, “We welcome the State Bank of Pakistan Monetary Policy Committee’s strong policy rate action, given the elevated inflation and heightened uncertainty that Pakistan is facing”.
The central bank is said to have taken this decision in view of rising inflation and external stability. But this big hike of 250 basis points will surely hurt businesses and investments. The objective of higher growth will turn into an illusion. This increase will ultimately lead to curtailing new employment opportunities. The SBP is requested to revisit its policy rate hike decision in the larger interest of country’s economy.
Inamur Rahman (Karachi)
Copyright Business Recorder, 2022