State Bank of Pakistan’s high interest rate will ruin the country’s economy

After the State Bank of Pakistan “surprisingly” raised the interest rate by 250 basis points, the Federation of Pakistan President of the Chambers of Commerce and Industry (FPCCI) Irfan Iqbal Sheikh said, this will put an end to economic and commercial activities in Pakistan.

Chambers of commerce are in a state of panic and shock as they speculate on how to deal with the fallout, reported The Grandstand Express.

The State Bank of Pakistan raised the interest rate by 250 basis points to 12.25%, local media reported on Thursday.

Expressing grave concern over the rise in interest rates, FPCCI Chairman Sheikh stressed that its repercussions would be felt on economic activities in the absence of any government support.

He also said that the move will also hurt the country’s exports. He mentioned that the country was already facing a huge disadvantage as interest rates in countries in the region were lower than in Pakistan.

Making comparisons with other economies, he said the policy rate in Malaysia stood at 2pc, in China at 3.7pc and Bangladesh to 5 pc, reports the newspaper.

“If interest and export refinancing rates don’t come down drastically in Pakistan, we won’t be able to compete with countries in the region,” he said.