THE new Governor of the State Bank of Pakistan said in an interview that the current high interest rates were going to be reviewed. They should be. But the likelihood of their being lowered is dismal. This paper was one of the first to predict an increase in interest rates in each of the instances the rates have been hiked by State Bank. Those predictions were based on the profile of recommendations that global financial institutions would likely give to the government in exchange for the money it would be doling out. Predictions about subsidy decreases, lesser money market interference to shield the rupee and higher rates of interest, therefore, were no-brainers. In this recent interview, Mr Saleem Raza himself said that the decision to increase the interest rate was suggested by the IMF and that a more recent suggestion/directive to do the same has been postponed. The Fund, however, is not going to be patient with the postponement. Informal word out, not just at the Fund but a number of financial institutions, talks of real interest rates, which are the difference between the interest rate and the rate of inflation. Our real interest rates, they say, are actually in the negative. Now, technically speaking, this might also not be an incorrect way to look at the issue. But the costs of doing business in the country have been rising rapidly as a result of these interest hikes. And, as a recent study shows, there really is a direct and corresponding increase in the inflation rate. Raising interest rates to tackle the excess liquidity in the money markets is one thing, but raising it so much that it cuts the credit lifeline of the entrepreneurial impetus that corrects the supply-side of our economy is another. The new Governor undoubtedly has a tough job. But he should not let any international financial institution frame the paradigm of economic management. It is the duty of the government to shield its citizens from inflation. And that might be prioritized higher than playing the accountant.