As announced recently, the State Bank of Pakistan (SBP) has further cut down the interest rate by 50 basis points, bringing it to its lowest level in 42 years. The reason specified by the SBP: inflation has shown a downward trend and is bound to further decrease. One wonders how the SBP pencilled this conclusion — every man on the street knows that the prices of commodities and eatables are and have been on an upward trend. Even the price of a basic commodity like wheat flour has increased by Rs10 for a 10-kg bag. It appears that the purpose of lowering interest rates is to favour the business class, to make loans cheaper for them than in the past — notwithstanding the fact that these businessmen try to get loans written off in most cases. The present management of the SBP seems to be in the good books of the business elite, as the country’s monetary policy seems to cater to them. No sympathy has been shown towards the poor and those in retirement, who preserved their savings in banks and saving schemes and are required to meet their expenses on the interests payments they receive. The reduction in the interest rate presents a big disincentive for savings. This is in great contrast to the policies of previous governments that encouraged savings. I, therefore, request the authorities of the SBP to reconsider their policies and keep in mind the welfare of retired people and pensioners.
Dr. Nisar Kiyani
pk.shafaqna.com
