Karachi, December 13, 2023 – The Korangi Association of Trade and Industry (KATI) voiced its disappointment on Wednesday over the decision by the State Bank of Pakistan (SBP) to maintain the policy rate at 22%.
The President of KATI, Faraz-ur-Rehman, expressed dismay, especially considering the global economic landscape and recent positive developments.
Despite anticipation in financial circles of a potential reduction in the policy rate, the Monetary Policy Committee opted to keep the rate unchanged for the third consecutive meeting. This decision has raised concerns within the business community, particularly in light of the promising performance of sukuk bonds in the global market and the recent decline in oil prices.
President Faraz-ur-Rehman underscored the adverse consequences of sustaining the highest interest rate for six consecutive months. He stated that various industries are now on the brink of destruction due to the financial strain imposed by high-interest loans. The prolonged maintenance of such rates, coupled with the State Bank’s indication that reductions might not occur in the near future, has sparked apprehension among industrialists.
In a passionate appeal to the government, President Faraz-ur-Rehman urged an immediate reduction in interest rates to relieve industrialists from the burden of high-cost loans. He argued that such a move would not only ease financial pressures on businesses but also stimulate economic activities, bolster commercial endeavors, promote industrialization, and create much-needed employment opportunities.
Highlighting the challenges faced by industries, President Faraz-ur-Rehman lamented that the current economic scenario makes achieving the government’s growth target of 2 percent increasingly challenging. He emphasized that the persistence of a 22% interest rate poses a significant threat to economic recovery.
Despite positive economic indicators, the high policy rate threatens to impede the country’s path to recovery. Faraz-ur-Rehman stressed the urgency of reducing the interest rate to shield the population from the dual impact of inflation and escalating unemployment. The business community is anxiously awaiting responsive measures that would help foster a more conducive environment for sustainable economic growth.
As stakeholders across various sectors closely monitor the economic policy landscape, the call for a review of the policy rate resonates as a critical step to support businesses, encourage investment, and propel Pakistan towards a more robust and resilient economic future.
