PHOTO: FILEBusinessmen have raised concerns about the reluctance of commercial banks to provide loans to the private sector at interest rates lower than 24%, attributing this issue to the prevailing 21% key policy rate in the country. In addition to the 21% policy rate, banks also charge additional profits ranging from 2% to 3%, according to Ismail Suttar, President of the Lasbela Chamber of Commerce and Industry. Speaking to the Express Tribune, Suttar highlighted that these exorbitant interest rates are unsustainable for industries, particularly in the current highly competitive market. The State Bank of Pakistan (SBP)’s Monetary Policy Committee (MPC) recently decided to maintain the policy rate at 21%, despite the significant slowdown in economic activity. Private sector credit has also plummeted, leading to a record low investment as a percentage of GDP.
