President Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Ifran Iqbal Sheikh has expressed profound disappointment over unexpected and massive hike in key police rate of 20 bps by the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP).
He said that the business, industry and trade community is shocked; and, clueless at the same time on how to cope with its fallout on economic activities, viability of doing business in Pakistan and inevitable adverse impacts on exports – in the absence of any governmental support.
Mr. Irfan Iqbal Sheikh added that a comparative analysis of the interest rates in Pakistan and the regional countries also show a big difference to Pakistan’s disadvantage; namely, Malaysia is at 2 percent China is at 3.7 percent; India is at 4 percent and Bangladesh is at 5 percent.
He emphasized that if the interest and export refinancing rates are not decreased drastically in Pakistan, we will not be able to compete with the regional countries as well.
He explained that the current tide of the inflation had nothing to do with the policy rate of SBP; but, it was due to the political uncertainty and lack of any direction in economic policies due to it. Additionally, he added, that the inflation in Pakistan has been due to supply-side disruptions and again had nothing to do with the interest rate.
President FPCCI elaborated that it was business community’s genuine demand, even before the recent interest rate raise.—INP
