Call for Single-Digit Interest Rates Ahead of Monetary Policy Announcement

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

According to Tanveer, this measure could significantly transform the economy by fostering expansion and easing the burden on borrowers.

In a released statement, Tanveer highlighted the importance of adopting proactive strategies to bolster economic revitalization. He stated, “Achieving single-digit interest rates is vital for stimulating economic growth and overall progress. It is imperative that the State Bank of Pakistan undertakes decisive steps to curtail interest rates to single digits.”

He emphasized the pressing need to lower the interest rate to 6% in order to encourage economic activity.

He noted that with inflation already at 4% and the Consumer Price Index (CPI) at 0.3%, the existing 11% rate is excessively high. A decrease, he argued, would invigorate industries, enhance export competitiveness, and result in savings of Rs3.5 trillion for the government.

Tanveer, who serves as Patron-in-Chief of the United Business Group (UBG), made this appeal prior to the Monetary Policy Committee meeting scheduled for Wednesday, July 30. While forecasts suggest a policy rate reduction of 1-1.5%, Tanveer is urging the central bank to take more drastic action by bringing interest rates down to single digits.

The business sector is keenly awaiting the SBP’s decision, with hopes that it will provide a much-needed impetus to the economy. Given expectations that inflation will remain controlled, Tanveer believes that this is an opportune moment for the SBP to act decisively.