KARACHI: Pakistan Chemicals and Dyes Merchants Association (PCDMA) has voiced deep disappointment over the State Bank of Pakistan's decision to increase the policy rate by one percent, warning that this measure could lead to a further slowdown of the national economy and negatively impact business activities.
According to Pakistan Chemicals and Dyes Merchants Association, Chairman Salim Valimuhammad emphasized the detrimental timing of the rate increase, highlighting the global economic uncertainty that already burdens Pakistan's trade and industry sectors. He criticized the rationale behind using interest rate hikes as a tool to control inflation, contending that such measures have historically failed to alleviate the burdens on traders and industrialists.
"When interest rates rise, economic activity slows down. This is not a new phenomenon - we have been highlighting this from the very beginning. The opportunity to reduce rates was missed when conditions were favorable, and now, amid rising fuel prices and mounting inflationary pressures, the decision to hike rates will only worsen the situation," Valimuhammad stated.
He further stressed the importance of government and central bank responsiveness to the concerns of the business community. Valimuhammad urged policymakers to consider a pro-growth monetary policy that includes lowering interest rates to encourage industrial and commercial activity, create employment opportunities, and bolster economic stability.
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