Industry slams 100bps hike in interest rate

While slamming another 100 basis points hike in the benchmark interest rate to a record 21 per cent, the business community on Tuesday questioned the government’s approach of fighting inflation by jacking up lending rates saying the strategy has failed to produce desired results but slowed down economic activities. “The entire business community has refused to accept the 100 basis points hike in the policy rate to an all-time high at 21 per cent,” announced Federation of Pakistan Chambers of Commerce and Industry President Irfan Iqbal Sheikh. In a statement, he said the benchmark interest rate has risen by a whopping 1125bps in the last 14 months but failed to check inflation. “If that is not the governance and regulatory failure, then what would the failure look like to move the government for a course correction? he asked. The trimming of growth projections by both the World Bank and the Asian Development Bank to 0.4-0.6pc for FY23 is the direct outcome of the regressive, IMF-dictated and recessionary monetary policy which has dried out the access to finance for businesses, the FPCCI chief lamented. The country’s exports have posted negative growth for the seventh month in a row and the two major industries like textile and IT have persistently been facing a decline.