President of Korangi Association of Trade and Industry (KATI) Salman Aslam has expressed concern over the sudden increase in interest rate by SBP by 2.5% and setting the policy rate at 12.25%. He said that the unexpected meeting and decision of the Monetary Policy Committee would cause irreparable damage to the economy.

Salman Aslam said that due to the increase in production cost, and stabilization in electricity, gas and petrol prices, it is very difficult to compete with other countries in the region, including India, China and Bangladesh. Salman Aslam said that increase in interest rates; export orders are also likely to be affected due to which the wheel of the industry is becoming extremely difficult to move.

The country’s economy is already under pressure due to the political crisis. In such a scenario, the abrupt rise in interest rates by the SBP is beyond comprehension. He said that given such measures, there were concerns over the undue autonomy of the SBP in the business community.

President KATI appealed to Prime Minister Imran Khan and Finance Minister Shaukat Tareen to immediately notice the increase in the monetary policy rate. He said that due to political instability, the dollar’s value had reached an all-time high and a significant increase in interest rates was tantamount to inviting a major storm of inflation.

Salman Aslam said that the people of Pakistan and the business community could not afford further inflation. He said that industrialists and traders were facing an economic crisis, and rising interest rates above 12 percent would destroy industries and exports of the country. Expensive bank loans will further increase the cost of production.

President KATI also appealed to Governor SBP to immediately reverse the interest rate hike in the economy’s best interest.