PESHAWAR: The Sarhad Chamber of Commerce and Industry (SCCI) on Monday urged the State Bank of Pakistan (SBP) to bring down the policy rate to the single digit to give impetus to economic growth.
In a statement, SCCI President Junaid Altaf said that bringing the policy rate to the single digit would help revive industries, ensure ease of doing business and put the economy on track to sustainable growth.
He urged the central bank to realign its monetary policy with ground realities, warning that the current interest rate was strangling the economy and burdening taxpayers.Junaid Altaf asked the government to create a pro-business environment by cutting interest rate, lowering power tariff, and supporting export-led growth.
Quoting official figures and economic indicators, he said that inflation was hovering below five percent and argued that the policy rate of 11.5 percent was unjustifiable. He noted that Pakistan’s interest rate was nearly double that of regional competitors.
The SCCI chief said that the business community had consistently raised concerns that high borrowing costs were creating challenges for traders.“Businesspeople find it difficult to compete with international competitors who are operating under favourable conditions,” he remarked. Explaining key reasons and ground realities of reduction in policy rate, he said that the business community had been demanding the government bring down policy rate to the single digit.
“Lowering policy rate will strengthen currency, boost macroeconomic indicators and surge domestic demand,” he said.He said the reduction in interest rate would lead the country toward sustainable economic growth and businesses and industries would grow rapidly.
Junaid Altaf said that though businesses were operating, the profit margins had shrunk drastically, making it difficult for firms to cover expenses.The SCCI chief urged the SBP to bring down the policy rate to the single digit, with a target of 6 percent by next three to four months, aligning Pakistan with regional benchmarks and unlocking economic potential.
“Reducing the interest rate would not only cut domestic debt servicing costs by half but also stimulate business activity, create jobs and make Pakistan competitive in global markets,” he believed.
