KARACHI – In the recent Monetary Policy, Market was not expecting such a high jump, it is an un expected jump of 1.5 %, may be due to IMF Dictation as they are loan Sharks. MPC / SBP announced increase in key policy rate by 150 basis points to 8.75% said ateeq ur rehman (economic & financial analyst).
He expressed that, I am afraid cost of credit will be more expensive as SME financing and micro financing will be more expensive. The access to finance has become a hard nut to crack for small businesses.
The increase in policy rate will increase the cost of manufacturing by 1.5 to 2% eventually increasing the cost of commodities. Today inflation is mounting to 18.34% therefore it is expected to touch heights.
The GDP Growth target by 5% is getting unattainable.
Investment will further slow down and Savings will see no improvements.
We are a debt burden country with an estimated external debt of USD 125 billion, by this increase in policy rate, the Debt will further grow up to Rs. 300 billon , which is crucial and a mega burden, said ateeq. SBP and the Ministry of Finance are requested to revisit and frame a rate up to 3 to 4 %as in the region it is like 4.4% in Bangladesh and 2 % in Thailand.
