'How will businesses grow now?' Sherry Rehman slams interest rate hike

ISLAMABAD: Parliamentary leader of the Pakistan Peoples Party in the Senate Sherry Rehman slammed on Tuesday State Bank of Pakistan over jacking up interest rate by one percent.

In a statement, she said Pakistan has raised, what she termed, Asia’s highest interest rate again to 13.25 per cent.

“How will businesses grow now? Who is saying yes to all this stuff,” questioned Ms. Rehman. “Never got this bad no matter how bad the previous government.”

SBP Governor Dr Reza Baqir in a press conference today unveiling the monetary policy for the next two months announced 100 basis points hike in the interest rate, which now reached to 13.25 percent.

The decision made due to increasing inflationary trend and devaluation of the rupee, he said.

The governor said that the inflation forecast has been revised up to 11-12 percent for the current fiscal year, however, it is expected to improve in the next fiscal year 2020-21.

He said that the central bank would consider downward revision of the the interest rate if inflation eases and demand further softens.

The central bank chief said that “The interest rate hike will help control dollarisation of the economy. People will prefer to keep savings in rupee rather than in the foreign currency.”

He said the interest rate hike will benefit those who have made savings in saving accounts at banks or in national saving schemes.

The SBP has increased the key interest rate by 7.5% since May 2018 to 13.25%.

The Monetary Policy Committee of SBP met today at SBP Head Office in Karachi to decide about the Monetary Policy for next two months.