Historic jump by SBP, jacking up key policy rate by 100 basis points to a record high of 21% with a view to controlling inflation is not acceptable to the Business Community said ateeq ur rahman ( economic & financial analyst).
Inflation is expected to stay at elevated level as we are a Cash Economy not a Mortgage Economy therefore this huge rise in policy rate will not decline inflation, especially the food inflation .
He added that the prices to remain higher due to demand and supply gap of essential items, exchange rate depreciation and upward adjustment of prices of Petrol, Diesel, Gas and Electricity.
Economically speaking in our country, Supply Chain have severely being affected due to closure of various industries owing to government restrictions of opening LCs and this massive rise in basis points will effect tremendously the Logistics and Supply Chain, again said ateeq.
Further in such a broken economy, the Wealth Creation is eminent hence producing Wealth Distribution which is not possible without Working Capital. The Working Capital is only possible where the Access to Finance and Cost of Credit is easy. In such cases the Working Capital is not only difficult but impossible, also. Thus the Business Community, Industrialist, Traders, SMEs and Cottage Industry are continuing to be in hot water.
