Muhammad Shakeel Munir, President, Islamabad Chamber of Commerce & Industry (ICCI) has called upon the government to urge the SBP to withdraw hike in its benchmark interest rate, which has been increased to 15 percent, in order to save the economy from further troubles as this historic hike would badly affect the growth of business activities and cause further slump in the economy.

Muhammad Shakeel Munir said that the benchmark interest rate in Malaysia was only 2.25 percent, Indonesia 3.5 percent, China 3.7 percent, Bangladesh 4.75 percent and India 4.9 percent, but it was 15 percent in Pakistan due to which it was not possible for our private sector to compete effectively for promoting trade and exports. He said that such a massive hike in policy interest rate would prove disastrous for industries and the SME sector as these sectors needed cheap loans for growth and expansion. He strongly demanded that the government should intervene and get the SBP’s decision withdrawn with immediate effect to save the private sector from more problems.  

ICCI President said that the business community has shown great concerns over the SBP’s move to increase the interest rate to 15 percent at a time when power, gas, and petroleum prices have already reached new highs. He said that the interest rate in Pakistan is many times higher than in the region, and in such circumstances, no investor would consider investing in Pakistan or setting up any new industries that would ultimately prove more harmful to the economy. Therefore, it is important that SBP should consult with the stakeholders to save the businesses and economy from the negative impact of a hike in its interest rate, he demanded.

Jamshaid Akhtar Sheikh Senior Vice President and Muhammad Faheem Khan Vice President ICCI said that many industries had invested billions of dollars in importing machinery in the last few years at a low markup rate after obtaining loans from the banks. However, industrialists and exporters would not be able to import machinery and plants at a 15 percent policy rate that would lead to a suspension in the industrial activities and thus would be detrimental for the economic future of the country. They stressed that SBP should revise its decision and bring down the benchmark interest rate to single digit level in order to facilitate the growth and expansion of business and industrial activities.