Rawalpindi: /DNA/ – The Rawalpindi Chamber of Commerce & Industry (RCCI) on Wednesday showed strong reservations for increasing 100 basis points in the interest rate by the State Bank of Pakistan taking it from 8.75 percent to 9.75 percent.

The RCCI President Nadeem Rauf in a statement said that it is very surprising that SBP who as per best practices reviewed its monetary policy after two months but this time it reviewed less than a month period.

RCCI chief urged the government to withdraw the hike as it would increase the credit cost of commercial banks, ultimately have a bad effect on the growth of industrial activities and create more difficulties for the Small and Medium Enterprise (SME) in its efforts aimed at reviving the economy.

He said the central bank had raised its interest rate by a sharp 100 basis points in one go. He said that the sharp increase in interest rate would discourage investors from considering Pakistan for investment and badly affect investment in different projects.

Nadeem Rauf said that Pakistan needed quick revival of business and industrial activities to improve the ailing economy which was badly hit by COVID-19 , but a 100 basis point increase in interest rate would make the cost of credit unaffordable for the business community and badly affect their efforts for promoting business activities.

RCCI chief said currently the Government is facing pressure on the fiscal deficit, and this increase in interest rate will increase the budget deficit.