Karachi: Pakistan Vanaspati Manufacturers Association (PVMA) Chairman, Sheikh Umer Rehan, has
strongly urged the government and the State Bank to reduce the interest rate by 500 basis points (5%) in
the upcoming Monetary Policy Committee (MPC) meeting on November 4. Sheikh Umer emphasized
that the policy rate should be swiftly brought down to single digits in the next committee meeting to
support economic stability and ease financial pressures on businesses.
He highlighted the recent dip in inflation, which has reached 6.3% in October, while the real interest rate
currently stands at 10.2%. Citing these indicators, he advocated for an immediate reduction in the
interest rate from 17.5% to 12.5%, to align it with inflation and the real interest rate, making financing
more accessible for industry and business.
The PVMA chairman stressed that bringing the policy rate to single digits is crucial to reduce the cost of
borrowing, encourage investments, and make bank loans affordable. Such a move, he argued, would
foster sustainable growth and ease financial strain on businesses.
Sheikh Umer Rehan also addressed the urgent need for the government to resolve issues with
Independent Power Producers (IPPs) to ensure stable and affordable energy supplies for industries. He
suggested that diplomatic dialogue could be employed to convince international stakeholders, like
Germany, to support Pakistan's economic stability by foregoing additional IPP profits during challenging
times, as Pakistan has consistently fulfilled payment obligations under IPP agreements.
ADVERTISEMENT
