Business Leader Urges SBP to Slash Interest Rates

LAHORE: As the State Bank of Pakistan (SBP) gears up to reveal its monetary policy stance, prominent business figure S.M. Tanveer is advocating for a substantial decrease in interest rates, aiming for a single-digit figure.

He asserted that this measure would dramatically transform the economic landscape by fueling expansion and easing the burden on borrowers.

In a formal statement, Tanveer highlighted the necessity of implementing robust strategies to bolster economic revitalization. He stated, “Single-digit interest rates are vital for fostering economic growth and advancement. It is imperative for the State Bank of Pakistan to adopt decisive action and lower interest rates to single digits.”

He emphasized the immediate requirement to curtail the interest rate to 6% to invigorate economic momentum.

Given that inflation has receded to 4% and the Consumer Price Index (CPI) stands at 0.3%, the existing rate of 11% is deemed excessively high. A reduction would provide impetus to industries, enhance export competitiveness, and yield savings of Rs3.5 trillion for the government.

Ahead of the Monetary Policy Committee meeting scheduled for Wednesday, July 30, Tanveer, who serves as Patron-in-Chief of the United Business Group (UBG), is articulating this demand. While forecasts suggest a policy rate cut of 1-1.5%, Tanveer is pressing the central bank to take more drastic steps by driving interest rates down to single digits.

The business sector is keenly anticipating the SBP’s verdict, with hopes that it will deliver a much-needed stimulus to the economy. With expectations that inflation will remain contained, Tanveer posits that now presents an opportune moment for the SBP to act decisively.