Industrialists have shown strong opposition against the recent hike in interest rate by the State bank of Pakistan. The central bank has raised interest rates by a sharp 100 basis points. The rate increases from 8.75% to 9.75 %.
This increase in the interest rate will discourage investors from investing in Pakistan and will affect many different projects. This hike in the interest rate will also increase the credit cost of commercial banks, causing a bad effect on the growth of industrial activities and creating more difficulties for the Small and Medium Enterprises (SMEs).
Back in November, the SBP had increased the interest rate by 150 basis points that had negatively affected earnings and stock prices, causing the high cost of borrowing loans for companies and consumers in an economy.
The incumbent government should take steps for the quick revival of business and industrial activities to improve the ailing economy which had been badly hit by Covid-19. However, this unbearable increase in the interest rate will make the cost of credit unaffordable for the business community and affect their efforts to promote business activities.
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