KARACHI: Korangi Association of Trade and Industry (KATI) Tuesday express serious concerns over hike in benchmark policy rate and termed it as disastrous for the economy.
KATI) President Faraz-ur-Rehman in a statement lambasted the State Bank of Pakistan (SBP) for the increase in the interest rate to 17 per cent.
However, he welcomed the announcement by Federal Minister for Maritime Affairs Faisal Sabzwari and Minister for Commerce Naveed Qamar to waive demurrage fines on goods stuck at ports.
KATI President said that by waiving the fines on goods stuck at the ports, millions of dollars of foreign exchange will be saved and the problems of the importers will end.
He said that the State Bank also ended the months-long crisis by allowing 180 days late payment and removing the condition of prior authorization. Faraz-ur-Rehman said that by clearing the import containers, the shortage of raw materials will end and the public will be spared from bearing the burden of fines.
President KATI said that the increase in interest rate will further increase inflation, the announcement of monetary policy gives the impression that the State Bank wants industrialists to lock up the industry and earn interest by keeping money in banks.
He said that it is surprising that efforts are being made to change the Islamic Shariah system and interest-free banking system in the country. He said that in the current financial crisis, no industry can afford to do business at a 17 percent interest rate.
This move will lead to the end of industrial development and the closure of industries while unemployment will increase rapidly. Faraz-ur-Rehman said that the rich can earn profits by keeping money in the bank, but how will the poor who have no savings survive, the government should also think about them.
President KATI demanded that the interest rate should be reduced immediately to save the industries from closing down, otherwise the economic crisis is likely to become more serious.