KARACHI: The Pakistan Vanaspati Manufacturers Association (PVMA) has urged the State Bank of Pakistan (SBP) to bring down the policy interest rate to single digit in its upcoming Monetary Policy Committee meeting on December 16.

PVMA Chairman Sheikh Umer Rehan highlighted the need for a significant reduction, citing record-low inflation figures as a basis for the demand.

In a statement, Sheikh Umer noted that inflation dropped to 4.9% in November, the lowest in 80 months, down from 7.2% earlier.

He emphasized that maintaining the policy rate at its current high level of 13-15% is detrimental to the economy and business activity.

“The current economic environment allows for a reduction of more than 5% in the interest rate,” he said.

The PVMA Chairman praised recent government efforts, crediting the Prime Minister, Finance and Commerce Ministries, and the Army Chief for steering the country out of economic turbulence.

He highlighted the Special Investment Facilitation Council (SIFC) as a key contributor to these improvements, which he said have restored confidence in the business community.

Sheikh Umer argued that lowering interest rates would help revive Pakistan’s sluggish economy by providing access to affordable loans for industrialists, stimulating investment in the industrial sector.

He added that reduced interest rates would also ease the government’s debt burden and spur economic growth.

“Lower rates will increase trade opportunities and economic activity, putting Pakistan on track to meet its growth targets by the end of the fiscal year,” he concluded.

Copyright Business Recorder, 2024