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ISLAMABAD: Islamabad Chamber of Commerce & Industry (ICCI) has strongly resented the raise of 50 basis points in key policy rate by SBP in new Monetary Policy taking it to 13 per cent from 12.5 per cent and termed it a highly unwise move as it will prove more harmful for the economy.
Zahid Maqbool, President, ICCI said that businessmen have been demanding single digit interest rate to promote private sector investment and to stimulate the economy. However, instead of bringing it down, SBP has further enhanced the interest rate which will slow down the growth of private sector despite the fact that private sector is considered as engine of growth for an economy.
He said SBP has claimed to control inflation by enhancing policy rate. However, this contention is not based on facts because hike in interest rate will push the inflation rate further up putting more burden on businesses and the common man.
He said that the already upward revision in the prices of electricity, gas and POL products has adversely affected the business and industry and this hike will create more problems for entrepreneurs as it will deprive them of affordable financing.
Zahid Maqbool said the increase in interest rate will also affect the tax collection target of the government as the contraction in business activities triggered by high credit cost will lead to less business income and less tax revenue. -Online
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