PBF urges MPC, SBP chief to announce interest rate at 6pc

Business Recorder

2 days ago

KARACHI: President of Pakistan Business Forum (PBF) Karachi Division, Malik Khuda Bakhsh has urged the Monetary Policy Committee and the Governor of the State Bank of Pakistan to announce the interest rate at 6 percent in line with business community expectations.
Malik Khuda Bakhsh stated that currently the country's CPI index is 0.3 percent and inflation has dropped to 4 percent. The IMF has also recommended that interest rates be kept close to the inflation rate. He said that Pakistan's current interest rate of 11% is too high, making it nearly impossible to conduct business. Reducing the rate to 6 percent is essential for the revival of business activities.
He supported the demand made by United Business Group's Patron-in-Chief, S.M. Tanveer, to reduce the interest rate to 6 percent in the upcoming monetary policy. He pointed out that the government holds 8.5 trillion rupees in interest-bearing liabilities. Lowering the rate to 6 percent could save around 3.5 trillion rupees, which would positively impact the economy—especially industries struggling with high interest rates and electricity costs.
He added that Pakistani exports could become more competitive globally, as international markets typically have interest rates between 4–5 perent. He criticized recent budget measures, such as Sections 37A and 37B which grant powers of arrest and detention, stating that such moves further hinder business growth.
Malik Khuda Bakhsh emphasized the need for a business-friendly environment and urged the government to reconsider policies that conflict with business interests. Instead, the focus should be on creating conditions that promote growth, investment, and competitiveness.
The PBF Karachi Region President further said that with inflation expected to stabilize around a long-term average of 7% in the coming quarters, a rate cut would be beneficial. Sustainable measures are needed to overcome economic challenges and restore investor confidence. Given the increase in imports and weak financial flows, pressure is mounting on the external account. Therefore, a cautious approach is necessary. Although the economy is showing signs of improvement, it still needs strengthening—and reducing the interest rate to a single digit (6 percent) is crucial to make loans more affordable and help industry grow.
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