Former President of the Islamabad Chamber of Commerce and Industry (ICCI), Dr. Shahid Rasheed Butt, on Friday, said the increase in interest rates to 21 percent by the central bank is a wrong decision. This move will not reduce inflation or bring economic stability, nor will it pave the way for the loan from the IMF, he said.

Shahid Rasheed Butt said that the current inflation in Pakistan is not related to the current account deficit or excess capital in the market but to government policies, including increased taxes and amplified prices of oil, electricity, and gas.

He said that the government had stopped imports for several months. Goods worth more than five billion dollars are stuck at the port, due to which many businesses are closed, and many commodities are in short supply in the country, which is the main cause of inflation.

He said that the continuous depreciation of the rupee and the confidence of the traders and the people are also affected. At the same time, hoarders and profiteers have also been given a free hand, causing inflation.

He said that SBP could not get anything out of the last increase in the interest rate to 20 percent and it will again fail to achieve any objective by increasing it to 21 percent.

According to the World Bank, Pakistan’s growth rate will be 0.4 percent, while the Asian Development Bank estimates the growth rate will remain at 0.6 percent.

Shahid Rashid Butt said that the country’s political situation is so disturbing that the world has lost faith in Pakistan. Other institutions and friendly countries are not ready to lend to Pakistan besides the IMF. It will be very difficult for the government to extend the repayment date of previous loans.