President of Korangi Association of Trade and Industry (KATI) Salman Aslam while reacting to SBP’s interest rate hike from 1.5 percent to 8.75 percent said that rapid rise in monetary policy will effect the economy. The export industry was facing difficulties due to high production costs. In such a scenario, a sudden increase of 1.5 percent in interest rates would further increase the cost of production. Industrialists would get expensive loans from banks which would further complicate the industry. He said that the monetary policy was expected to increase by 50 to 100 basis points, but the unexpected decision by the SBP has raised concerns among the industrialists.

President Salman Aslam said that increase in exports was essential for the recovery of the economy for which cheap loans were of utmost importance. However, due to increase in trade deficit and inflation, the monetary policy was tightened. He said that the industrialists were ready for all possible cooperation with the government to control inflation. The government should ensure cheap loans for the export sector so as to increase exports, foreign exchange reserves and strengthen the value of the dollar. He appealed to the government to reduce interest rates to 8 percent so that loans would be cheaper and Small and Medium Enterprise s (SME) would continue to use their full potential.