The interest rate in Pakistan more than doubled from a bordering country

Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Monday said interest rates in Pakistan were already higher than other countries in the region, which is now more than doubled in comparison to India and some many other countries.

Inflation is also higher than many countries in the region due to economic managers who push policies that contradict the ground realities, he said.

Mian Zahid Hussain said that the SBP has tried to stem the fall of the rupee and eliminate market uncertainty by an unprecedented hike in interest rates. Still, it may not achieve desired results as the economy is in a deep mess.

Talking to the business community, the veteran business leader said that the rupee had lost its value rapidly; the dollar available for Rs152 in May is now being traded at Rs175, for which all the credit goes to the economic managers.

He said that one hundred economists had estimated a maximum increase of one percent in the interest rate during a survey before the monetary policy announcement, which proved wrong. One hundred and fifty basis points raised it.

A good part of the disgruntled business community believes that the central bank is carrying out the IMF agenda regardless of ground realities that prove fatal to the people and the economy.

Mian Zahid Hussain said that the rupee is bearing the brunt of the authorities’ mistakes. Now, drastic measures will promote hunger and unemployment and reduce revenue as scarcity of gas and its high cost will drag GDP down.

The decision will increase the cost of doing business and jack up production costs of key crops, which will further worsen the food security situation. At the same time, lending to private sector borrowing will take a blow which will clip investments.

He said that long as the SBP has the tasks of ensuring economic growth and reducing inflation, it will not do its job as these two goals are contradictory.

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