Interest rate: President KATI disappointed over SBPs decision

KARACHI: Faraz-ur-Rehman, President of the Korangi Association of Trade and Industry (KATI), voiced disappointment over the State Banks decision to maintain the interest rate at 22%. Despite expectations of a reduction following the promising performance of Sukuk bonds in the global market and a decline in oil prices, the Monetary Policy Committee decided to uphold the current rate for the third consecutive meeting.

Expressing concern, President Faraz-ur-Rehman highlighted the adverse impact of sustaining the highest interest rate for six months on various industries, asserting that they are now teetering on the brink of destruction.

He emphasized that prolonged financial strain on industrialists is unsustainable, especially considering the State Banks indication that interest rates may not see a decrease in the coming year.

Faraz-ur-Rehman appealed urgently to the government, urging an immediate reduction in interest rates to alleviate industrialists from high-cost loans.

He argued that such a move would stimulate economic activities, boost commercial endeavours, promote industrialization, and create much-needed employment opportunities.

He lamented that, given the current scenario, achieving the governments growth target of 2 percent appears increasingly challenging.

Despite positive economic indicators, the persistence of a 22% interest rate threatens to impede economic recovery. Faraz-ur-Rehman emphasized the necessity of reducing the interest rate to shield the population from the dual impact of inflation and escalating unemployment.

Copyright Business Recorder, 2023