KARACHI: Captain Abdul Rashid Abro, central leader of the Pakistan Business Forum and former Vice President of FPCCI, has urged the Governor of the State Bank of Pakistan to lower interest rates to at least 5 percent in the monetary policy meeting scheduled for November 4.
He stated that this reduction is essential for promoting trade activities in the country, enabling exporters and industrialists to operate without fear or risk.
Captain Abdul Rashid Abro highlighted that current government statistics clearly indicate that inflation was 6.9% in September and is projected to decrease further to 6.3% in October. Under these circumstances, he emphasized the urgent need to reduce interest rates from 17.5% to 5% and to further decrease them to single digits by December.
200bps cut in key policy rate likely
He pointed out that economic and financial experts are also indicating that, given the decline in inflation, a corresponding reduction in interest rates is necessary to keep the industrial wheel turning. Lowering interest rates will provide essential support to small and medium enterprises (SMEs) as well as large-scale manufacturing.
Captain Abdul Rashid Abro added that to curb severe inflation in the country, it is crucial to increase industrial and commercial activities.
However, with the current interest rate of 17.5%, fostering trade activities is not feasible, and consequently, exports will not see an increase. Nevertheless, a reduction in interest rates would encourage new investments and assist the government in achieving its target of reducing inflation, a commitment made with the support of the World Bank.
Copyright Business Recorder, 2024
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