Karachi (September 9, 2024) – Pakistan’s renowned industrialist and United Business Group (UBG) leader, Farhan Hanif, has called on the Governor of the State Bank to reduce the policy rate to 10% in line with inflation. He urged the announcement of a 400 basis points cut in the interest rate during the upcoming Monetary Policy meeting scheduled for September 12.
Farhan Hanif emphasized that he stands as the strong voice of UBG’s leader and patron-in-chief, S.M. Tanveer, in demanding a 4% reduction in the interest rate. He welcomed the inflation rate coming down to 9% and noted that new industrial investments are now crucial for the country’s economy. However, obtaining loans at the current high-interest rates has become nearly impossible. Industrial production figures indicate the struggling state of both small and large industries. In this context, he expressed hope that the Prime Minister would take further steps to provide relief to SMEs.
Farhan Hanif highlighted that, in comparison to Pakistan, the policy rate is 8.50% in Bangladesh and 6.50% in India. Pakistan’s significantly higher policy rate puts exporters at a competitive disadvantage. To make Pakistani exporters more competitive, a reduction in the policy rate is essential. The government must lower production costs to boost exports, allowing the country to reap the benefits of international trade. However, this will only be possible if the interest rate is immediately reduced by 4% and eventually brought down to single digits.
