Islamabad : June 4 ,2024 : High interest rate has played a key role in damaging Pakistan ‘s economy beyond repair. The State Bank of Pakistan (SBP) pushed up policy rate or kept it unchanged at the highest level for the last 26 months. The official statistics suggest When Pakistan’s inflation was raging at 38 % in May last year , SBP kept policy rate at 22 % and now exactly after one year , inflation has gone down to 26 in May 2024 % SBP is proudly maintaing the policy rate at the same level of 22 % .Such a high policy rate has made Pakistan’s economy hostage to the local banking sector . Pakistan ‘s debt , in particular , domestic one has skyrocketed in the last few years due to high interest rate. High interest rate has doled out trillions of rupees to the banking sector in the last two years which essentially can be labelled as a banking mafia. High interest rate has literally brought economic activities to a standstill. Every big business house and industry closed down their businesses or suspended their industrial activities and deposited their cash with the banks to make easy money through interest on deposits. This scenario also made borrowing for rightful borrowers a no go area as they could not pay 28 % (22 % policy rates plus 4 % to 6 % kibor rate ) on interest on loans. The banking sector is the only beneficiary of high interest rate . Unfortunately , no one in this country voiced against irrationally high interest rate . Inflation has been used by SBP as
a basis of keeping policy rate at 22 % . But only body in this land of the poor could question SBP as to why its maintaining policy ate at 22 % for the last three months when inflation has reduced from 38 to 26 as per official figures . It seems those who are on the helm of the affairs are beneficiary of high interest rate or their priority is not painful economic situation of this country.