“Raising interest rates at high rates is a serious issue and has negative effects,” said Reda Musallam, Partner Manager of Truth, an Economic & Management Consultancy. “The banking system is responsible for pumping liquidity and controlling the rhythm and cash flows of the entire national economy.
He added: Whenever there is stability in the banking system is reflected positively on the national economy, the cost of financing is a critical element in the cost of investment.
He said: This will affect the cost of investment, customers’ ability to repay will be much lower and therefore the commitment will be less. He added: The rise in the interest rate leads to higher prices of services and goods in the domestic market.