State Bank of Pakistan Raised Interest Rates again, by 1% to 17%, citing rising inflation as the main reason.This is the first time this interest rate has been touched since 1997 / 8.
For FY23, the interest rate has been raised already by 3.25%. The Governor SBP Jameel Ahmed announced the decision. He said that the downward adjustment in fuel prices and reduction in fuel cost charges helped reduce inflation but that was not sufficient to bring the overall inflation down.
TANGENT states, as it has been stating since 2018 that this raising of interest rates is a completely destructive act, which is not addressing inflation but rather burning out the economy – this happened in the past as well. Inflation from specific sectors has to be met by increased supply, through markets or through barter. Nonetheless, this act will cause more harm than benefit.
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