Yasir Mehmood, a resident of Pakistan's coastal city of Karachi, took a loan of 30 lakhs from a private bank in 2017 with the intention of getting rid of a rented house and buying his own house. He thought that if he pays the bank installment every month like house rent, then in 20 years the house will be his own.
Sold the wife's jewelry. He bought a two-room flat in Gulestan-Johar area of Karachi by combining his savings and a loan from the bank and lived in the flat with his family. Salary would come every month and bank installment would be collected.
Yasir Mahmood told Urdu News that it is becoming difficult to survive on the limited resources and the same salary for the last 6 years and inflation has also increased tremendously.
In such a situation, the State Bank has once again announced a one percent increase in the interest rate.
When the loan was taken, the interest rate was 6 percent, now it is 17 percent. The income has not increased and the payment amount to the bank is continuously increasing. In the current situation, it is becoming difficult to pay the installment of the bank.
On Monday, State Bank Governor Jameel Ahmed announced during a press conference that the interest rate has been increased from 16 percent to 17 percent.
He said that interest rate is being increased by 100 basis points to control rising inflation in the country.
Dr. Shahid Hasan Siddiqui, an expert in economic affairs, while talking to Urdu News, said that in the current situation, the livelihood of the people has become more and more difficult, the data released by the Central Bank is worrying.
Who will be affected by the increase in interest rate?
Shahid Hasan Siddiqui says that the increase in interest rates is not just a change in numbers, it has a direct impact on the common man.
People who have taken personal loans, car installments or home loans will all have higher repayments. And this increase will go not on the principal amount but with the principal amount which is the amount of interest payment.
He said that due to inflation, i.e. rising prices, it is becoming difficult for people to get food and food and because of inflation, citizens are now forced to compromise in their children's education, health and other sectors.
Dr. Shahid Siddiqui, an expert in economic affairs, said that according to the Central Bank, inflation in the country has been recorded at 24.5 percent, which is much higher than neighboring countries. This shows how difficult it is becoming for the common man to make a living.
According to Khurram Shehzad, an expert in economic affairs, one of the reasons for the increase in the interest rate may be the condition of the International Financial Institution.
He said that only increasing the interest rate will not solve the problem, but the rupee will also have to be restored to its original state and the value of the dollar will have to be determined based on the open market rate.
The rate of development of the country is low. In such a case, the increase in interest rate will cause more difficulties for the industry. The effect of a one percent increase will be felt even by the common man.
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