Hike in interest rates to worsen inflation: Sherry Rehman

Islamabad: Pakistan People’s Party (PPP) Vice President, Senator Sherry Rehman has expressed serious reservations after the latest 1.5 per cent hike in State Bank’s interest rates.

“The interest rates have been increased in accordance with the International Monetary Fund’s (IMF) demands. In March, they were increased by 50 basis points and just two months later, they have spiked by 150 basis points to an eight year high of 12.25 per cent,” said PPP Parliamentary Leader in Senate.

Rehman added, “The government is implementing the IMF terms before the deal is even signed on. This is also evident in the unabated increase in dollar rate which has seen the rupee plummet to Rs. 152 in the open market. All this devaluation is going to make paying back our debt an onerous task. It appears that the government is nothing more than a silent spectator in front of the IMF. Every step it is taking seems to be an effort to please a few. Its haphazard decisions are wrecking the economy”.

“Given the trends, we can expect more increase in the interest rate and inflation in the next six months. The increase in interest rate will also drive unemployment further up in the months to come. It seems like the poor people of this country are not the government’s priority at all. Moreover, it is important to note that the IMF program will continue until the last quarter of 2022, leaving less than three quarters for the government to generate jobs. We hope that the government has not lost track of its promises of providing 10 million jobs to the people, so far the opposite has been the case,” she regretted.

“So far all the economic indicators are flashing red. The stock exchange index has fallen by 2.5 per cent today as well after undergoing its worst phase in over a decade, per capita income in the country has dropped by 8 per cent and revenue targets have been consistently missed. The government is repeatedly floundering in its efforts to reign in the economy,” she concluded.