Pakistan is the country with the highest interest rate and inflation rate in South Asia

William Johnson

The State Bank suddenly increased the interest rate by one percent. Pakistan’s prime interest rate has reached an all-time high of 22 percent.

The State Bank had decided to maintain the interest rate at the level of 21 percent this month, but two weeks later, referring to its previous position, it suddenly called an emergency meeting of the Ministerial Policy Committee and announced an increase in the interest rate by one percent.

After the State Bank’s decision, the base interest rate in Pakistan has reached the highest level of 22 percent, while Pakistan has become the country with the highest interest rate and inflation rate in South Asia. The competence of the Monetary Policy Committee is being questioned. are

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The State Bank, while justifying the increase in interest rates, has said in a statement that the government has increased the taxes and levy on petroleum products by ten rupees per liter as part of the recent changes in the budget, which is likely to increase inflation. Therefore, the interest rate had to be increased to control inflation.

The business community has completely rejected the increase in interest rates and demanded a reconsideration of the decision, even saying that the government should be smart or else businesses and industries will be locked.

Economic circles are blaming the IMF’s condition behind the sudden rise in interest rates and linking it to the government’s ongoing staff-level agreement with the IMF. Just three days before the interest rate hike, the State Bank has lifted the ban on all types of imports to meet the IMF’s condition, despite having only three and a half billion dollars of minimum dollar reserves, while Pakistan has one month. There is no reserve of dollars equal to the imports.

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Experts are expressing surprise at the SBP’s rationale for raising interest rates, saying that the increase in taxes and duties depends on prices, which have no direct relationship with interest rates, while interest rate hikes are the biggest factor. The loss is caused to the government itself, which increases billions of rupees in interest on its loans. It is also important that the State Bank increases the interest rate every time by saying that it has increased it from 7% to 22%. That the interest rate is being increased to control the inflation, then overall inflation in Pakistan is making a record of 38% and the inflation of food items is 45%. Doesn’t this mean that the disease is something else and the State Bank has not made a proper diagnosis and is doing its own thing. Reputation is at stake.

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According to the poet “The disease increased as the medicine increased”.

. Syed Rizwan Alam is a Senior Reporter of Sama TV. He has experience working in reputed newspapers and TV channels of the country and has been associated with journalism for the last 24 years.

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