Karachi, December 13, 2024 – The Korangi Association of Trade and Industry (KATI) has called on the State Bank of Pakistan (SBP) to implement a substantial cut of 500 basis points, or 5%, in the policy rate.
KATI President Junaid Naqi emphasized that the prevailing economic conditions present a strong case for such a reduction. With inflation dropping below 4% and significant improvements in key indicators, including foreign exchange reserves and a current account surplus, Naqi argued that the time is ripe for bold monetary policy action.
Speaking ahead of the SBP’s monetary policy meeting scheduled for December 16, Naqi urged the central bank to bring interest rates down to single digits. He suggested that a significant reduction in borrowing costs would serve as a much-needed stimulus for the economy. “Ending the year 2024 with a major cut in interest rates would be a welcome New Year’s gift for the public and the business community,” he remarked.
Naqi explained that lower interest rates would encourage businesses to take on affordable loans, enabling industrialists to expand operations, increase production, and stimulate economic growth. “Such measures would not only boost business activity but also drive higher exports, strengthen the rupee, and contribute to overall economic stability,” he added.
The KATI president also praised the government for its effective handling of economic challenges. He credited Prime Minister Shehbaz Sharif, his cabinet, and the military leadership for their collaborative efforts in stabilizing Pakistan’s economy. “Their unwavering commitment and strategic initiatives have been instrumental in steering the nation out of crisis,” Naqi said.
Naqi further acknowledged the pivotal role of the Special Investment Facilitation Council (SIFC) in achieving positive economic outcomes. He commended the council’s contributions to fostering a conducive environment for investment and growth.
Urging decisive action, Naqi reiterated that a policy rate cut would significantly benefit the economy by reducing financial burdens, increasing industrial competitiveness, and fostering long-term economic progress.