Kati slams 100 basis points increase in interest rates

KARACHI: Korangi Association of Trade and Industry (Kati) president Salman Aslam has expressed concern over 1 per cent increase in the interest rates and said that the latest decision of the State Bank of Pakistan (SBP) to increase the key policy rate to 9.75 per cent would increase inflation.

He said 9 per cent to 11 per cent inflation is of great concern. The government is trying to control inflation by raising interest rates but in the current economic scenario, this decision could not prove beneficial.

He suggested the government to provide facilities and incentives to the export industry to increase exports and also help fetch more foreign exchange; thus reducing the pressure on the rupee against the dollar.

The Kati president said tightening monetary policy would hurt the economy. The government’s growth target of 5 per cent is unlikely to be achieved.

Aslam appealed the government to take strict measures to increase exports, instead of tightening the monetary policy. If imports are reduced, then inflation can be brought down, he said, adding that the SBP’s move would make loans more expensive and would further increase inflation.

The Korangi industrial area has full potential to increase exports and if the government provides facilities, then Kati can play its role in increasing exports, he added.

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