Peshawar - The business community of Khyber Pakhtunkhwa on Thursday termed the decision of State Bank of Pakistan (SBP) to raise the key interest rate by 125 basis points, taking it to 15 per cent, detrimental for industrial growth, economic and trade activities.

Chairing a meeting of the industrialists and traders, Sarhad Chamber of Commerce and Industry president Hasnain Khurshid said the business community rejects historic increase in the interest rate. The meeting was also attended by chamber’s senior vice president Imran Mohmand, vice president Javed Akhtar, industrialists, traders and exporters.

The SCCI chief said the hike in policy rate will increase the cost of doing business. He said the decision wasn’t in the interest of the country’s economy, industries and businesses, which should be revised immediately.

He said that trade, industrial and commercial activities have already been slow down after the corona pandemic, while the announcement of hike in policy rate by the SBP under prevalent circumstances is completely incomprehensible. He urged Prime Minister Shehbaz Sharif and Finance Minister Miftah Ismail to take notice of this whopping increase in interest rate by the central bank.

Hasnain recalled that SBP had previously made a hike by 2.5 per cent, jacking up the interest rate at 13.75 per cent and again raising it by 125 basis points, taking it to 15 per cent, which will hurt investment and increase the cost of businesses.

While comparing Pakistan with its neighbouring countries, Hasnain said the policy rate in India is around 4.9 per cent and Bangladesh at 5.5 per cent, but it raised up to 15 per cent in Pakistan, which is an unfair decision and unacceptable to them under the prevailing economic conditions in the country. He observed the country’s economy was put on ventilator owing to inconsistent policies, and now it will further hurt it after hike in the interest rate.

He said that this hike would bring a new wave of inflation in the country and would also negatively impact the country’s exports. He said the current statistical figures are indicating negative growth and seems further deteriorating in coming days.

The SCCI chief attributed the current drastic decrease in foreign exchange reserves, exports, trade deficit along-with gas and energy crisis to inconsistency in economic policies and whopping foreign debts.

Hasnain called for revisiting economic policies, and requested the Acting Governor SBP Dr Murtaza Syed to take back the decision of increase in interest rate, in order unhurt trade and commercial activities in the country.