Increased interest rates will not improve the confidence of investors or strengthen local currency but it will subdue demand which will reduce the pace of erosion of forex reserves, said Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt.
The hike will also hit mega projects, manufacturing and the GDP while the forex reserves currently at the level of 10 billion dollars and rupee which has been eroded by 9.3 percent in five months will remain under pressure, he added.
Shahid Rasheed Butt said that government will need billions of dollars to avoid a balance of payments crisis as the twin deficits are getting out of control nullifying gains made in exports and remittances.
Hike in oil prices and unabated imports will increase import bill and the deficit which needs to be tackled by the economic managers.
The business community on Saturday rejected the State Bank of Pakistan’s decision of increasing its policy rate by 50 basis points to 6.5 percent, lifting it to a level of three-year high.
He noted that some optimistic business circles were expecting a reduction in interest rate to control adverse effects of the recession but the upward revision in lending rate has disappointed them.
Published in Daily Times, May 28th 2018.
Bollywood heartthrob Fardeen Khan, who is set for a grand comeback with veteran filmmaker Sanjay…
Sudanese directors and actors were in Egypt this week hoping to use the power of…
Pakistan's heartthrob singer Asim Azhar has announced his debut album 'Bematlab', days after raising concerns…
Showbiz starlet Amar Khan outlined her dream man and shared she wants someone like Bollywood…
Bollywood diva Katrina Kaif reportedly turned down an offer to make her debut in the…
Bangladeshi film "Mona: Jinn 2" has crossed borders to hit cinemas in Pakistan, extending its…
Leave a Comment