RAWALPINDI: /DNA/ – The Rawalpindi Chamber of Commerce and Industry (RCCI) on Friday expressed reservations over the increase of 100 basis points in the interest rate by the State Bank of Pakistan (SBP) taking it from 15 percent to 16pc.

RCCI Acting President Muhammad Hamza Sarosh in a statement urged the government to withdraw this hike as it would increase the credit cost of commercial banks and ultimately having a bad effect on the growth of industrial activities and create more difficulties for the Small and Medium Enterprises (SMEs) in reviving the economy, he further added.

He said that the business community was expecting that the interest rate would be reduced so that the wheel of the economy could flow.

He said that economic activities are already at a standstill and demand is low, so there is no logic in increasing the interest rate. Due to high gas, electricity and other tariffs, manufacturers are facing difficulties in meeting external orders, he added.

Hamza Sarosh said it will have an adversely effect on the growth of industrial activities and create difficulties for small and medium enterprises (SMEs) as they strive towards reviving the economy.

Pakistan needs quick revival of business and industrial activities to improve the ailing economy, however 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 Acting President demanded that SBP should withdraw hike in mark-up rates and bring it to single digit to encourage new investments, for revival of businesses and to give a jumpstart to the economy which is at standstill.