LAHORE – The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) has urged the government and Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) to immediately reduce interest rates by four percent in its upcoming review.
FPCCI President Atif Ikram Sheikh and United Business Group (UBG) Patron in Chief S.M Tanveer made the demand during a joint press conference where they called for a dip of up to 400 bps after inflation dropped to single digit in Pakistan.
They said bank loans were a major source of funding for small businesses, but they are unable to take benefit from it due to higher interest rates. He stressed that the decreasing the markup rates would accelerate economic activity in the country as it would help boost industrial and trade growth.
He lamented that high interest rates and the rupee devaluation were affecting the business and industrial sector.
He said that the policy rate cuts announced over the last two monetary policy meetings are too little, too late– as, the business, industry and trade community was expecting higher and substantive cuts in the key policy rate; instead of the meager 150 bps cut in June 10 monetary policy meeting and 100 bps cut in July 29 meeting.
Currently, the policy rate stands at 19.5 percent, effective from July 30, 2024.
