By Abdul Rafay
KARACHI: President of the Karachi Chamber of Commerce and Industry (KCCI), Muhammad Jawed Bilwani, while commenting on the State Bank’s decision to reduce the interest rate by 2.5 percent, bringing it down to 15 percent, stated that while KCCI had anticipated a more substantial reduction of at least 5 percent, the actual cut of 2.5 percent was inadequate and did not align with the declining trend in inflation, which has now fallen to single digit.
“With a reduction of 250 basis points, the key policy rate now stands at 15 percent, which remains too high. It is essential for the rate to be reduced more aggressively, ideally to between 5 and 7 percent, in line with many other countries in the region and around the world”, President Bilwani added in a statement issued on Monday. He emphasized that the business community wants to see interest rate dropping to single digit, as this would encourage borrowing and promote business expansion by lowering the cost of doing business, ultimately benefiting the economy.
President Bilwani acknowledged the State Bank of Pakistan for continuing to ease its monetary policy, noting that this was the fourth consecutive cut, reducing the interest rate from 22 percent to 15 percent. However, he urged for a more significant reduction to stimulate economic growth and alleviate the financial burden on businesses and consumers. He pointed out that the tight monetary policy implemented by the State Bank of Pakistan (SBP) had led to exceptionally high borrowing costs, causing substantial harm to the economy, particularly affecting the manufacturing sector. Therefore, a significant cut has become necessary.
