KARACHI: Business community leaders, including S.M. Tanveer, Zubair Tufail, Faisal Moiz Khan, Mazhar Nisar, Haji Ghani Usman, and Umar Rehan, have called on the government and the SBP governor to reduce interest rate by 500 basis points (5%).
United Business Group (UBG) Patron-in-Chief, S.M. Tanveer, has appealed to the government to support economic growth by making a one-time reduction of 500 basis points in the policy rate. He stated that a substantial cut in interest rates would not only stimulate economic activities but also prove beneficial for the government itself.
The President of North Karachi Association of Trade and Industry (NKATI), Faisal Moiz Khan, emphasized to the SBP governor the need to lower the interest rate by 4% to 5% in the new monetary policy.
SBP urged to cut policy rate by 500bps
This reduction, he argued, would bring the real interest rate closer to a sustainable level, making it feasible for businesses and industries to access loans. He pointed out that inflation in the country has been declining, with the rate dropping to 4.86%. In such a scenario, it is crucial for the Monetary Policy Committee to decide on a rate cut to pave the way for new investments in the industrial sector and provide employment opportunities for the youth within Pakistan.
Former President of the FPCCI, Zubair Tufail, former Senior Vice President Khalid Tawab, and Syed Mazhar Ali Nisar also called on the government to reduce the policy rate by 500 basis points to spur economic growth. They noted that recent reductions in the policy rate have positively impacted the economy across all sectors.
However, for further economic growth, a more significant reduction in the policy rate is needed. They highlighted that a noticeable cut in the policy rate would enhance economic activities, benefit the government, strengthen the confidence of local investors, and encourage foreign investment, which is essential for economic growth.
Former Chairman of the Pakistan Stock Exchange, Haji Ghani Usman, urged the government to take a step toward economic progress by reducing the policy rate by 5%. He stated that a substantial reduction in the policy rate would not only promote economic activities but also attract local and foreign investors toward new industrial investments. The government should aim to bring the policy rate to single digits, creating a conducive environment for fresh investments in the country.
Chairman of the Pakistan Vanaspati Manufacturers Association (PVMA), Sheikh Umar Rehan, has also demanded that the SBP bring the interest rate into single digits in today’s Monetary Policy Committee meeting. He stated that inflation has been consistently declining for several months, with November’s inflation rate dropping from 7.2% to 4.9%, making a reduction of over 5% in the policy rate feasible.
Copyright Business Recorder, 2024
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