Economic experts have welcomed the monetary policy of the State Bank of Pakistan (SBP), which was announced on Tuesday. The Monetary Policy Committee (MPC) has chosen inflation as its priority and kept the key lending rates unchanged at seven percent. The SBP has recognised the need for continued support to small businesses during the fourth wave of Covid-19. “In reaching its decision, the MPC considered key trends and prospects in the real, external and fiscal sectors, and the resulting outlook for monetary conditions and inflation,” said the SBP statement. Dr Kaiser Bengali, a renowned economist, said the central bank made the best decision to maintain the policy rate at 7pc amid the current environment of continued uncertainty. He said, “Interest rate in Pakistan cannot be the same as in western countries because the structure of our economy is different, and it should not be any less than the current rate (7pc). The decision of the central bank to maintain the policy rate is absolutely correct.” In past, he said, when the interest rate went down a lot, speculation increased because investors started taking loans from banks and investing in the stock market and real estate. On increased car financing, Dr Kaiser said it’s not a good sign for the economy that a large part of the population has cars. Import of petrol and other oil products will increase and foreign exchange will go out of the country, affecting the balance of payments. Criticising the government’s policy of tax relief to slash car prices, Dr Bengali said the government has no economic direction and it is making decisions under the pressure of different lobbies. Adopting the policies which need foreign exchange force you to beg for it from the world. Petrol import will increase if everyone has a car, as a result, your foreign exchange will go out of the country, Kaiser said. On the recent hike in the US dollar rate, Dr Kaiser said the reason behind the drop in dollar rate in the past few months was not that our economy had improved or exports increased, it was because we got foreign loans and also floated bonds. Exchange Currency Association of Pakistan (ECAP) president Zafar Paracha also praised the central bank’s decision to keep the interest rate at 7pc and termed it a wise decision focusing on controlling inflation and economic and industry growth. The ECAP chief also praised the SBP’s policy of foreign exchange and said there is no intervention of the central bank in the currency market. He said increasing the dollar rate is normal, in past it has touched Rs168 also and later came to normal at Rs155. Our machinery and raw material import is increasing and that’s a positive indicator for country’s exports. Fluctuation in the rate of foreign exchange is normal if the imports increase, Zafar Paracha said.