Only countries which have lower interest rates have healthier economies.
NIDERRAU, GERMANY: When the economy is doing poorly the central banks normally cut interest rates in order to promote stronger growth at the expense of low inflation. That appears to be the logic behind this move.
It is true that lower interest rates can cause inflation, but in Pakistan’s case, the inflation is more related to imports and with the falling value of rupee, things won’t get cheaper. In fact, it will encourage spending, which in turn increases jobs. Only countries which have lower interest rates have healthier economies. A prime example is Germany, where the jobless numbers have been declining consistently. Hopefully, it stimulates business and economic activity in the private sector. The bottom line is fewer jobless.
Sharif Lone
Published in The Express Tribune, October 12th, 2011.
