S.M. Tanveer, Patron-in-Chief of the Federation of Pakistan chambers of commerce and industry (FPCCI), has pointed out that interest rates in Pakistan have been consistently higher over the past decade than in countries with currencies pegged to the US dollar, such as Hong Kong and the UAE.
This has created an unsustainable gap between our interest rates and those of stronger economies, putting pressure on the rupee and making everyday life more expensive for all of us.
He has urged the government to take immediate action to stimulate economic growth and alleviate the suffering of the common man.
According to him, while global interest rates have remained stable around 4-5%, Pakistan’s policy rate has peaked above 22% and still stands at 11%, despite inflation falling to just 4%. This wide interest rate gap is having a devastating impact on our economy and our people.
Tanveer said high interest rates are causing savings to lose value faster, prices of essentials to rise, businesses to struggle to survive, job opportunities to shrink, and exports to become uncompetitive. The government is also spending trillions just to pay interest on domestic debt, which is unsustainable.
He has demanded a reduction of interest rates to 6% – immediately to lower inflation further, cut debt servicing by Rs 3.5 trillion, boost businesses and create jobs, stabilize the rupee, and promote real growth and exports
