Karachi: President of the Korangi Association of Trade and Industry (KATI), Junaid Naqi, has termed the State Bank of Pakistan’s recent 2% interest rate cut as inadequate. He emphasized that inflation, now at 4.9%—its lowest in six years—warrants a much larger reduction in policy rates to single digits. He argued that the improving economic indicators, including the strengthening of foreign exchange reserves, the appreciating rupee, and a current account surplus, create a strong case for deeper cuts to support economic growth.
Naqi noted that inflation had declined faster than the State Bank’s projections, dropping from 7.2% to 4.9%. He stated that the business community had consistently advocated for single-digit interest rates to help spur industrial growth and boost economic activity.
He highlighted that the current high policy rate has significantly slowed economic momentum and constrained industrial activities. A further reduction in interest rates, he argued, is essential to enable industries to access affordable credit, address capital shortages, and stimulate industrial expansion.
The KATI president stressed that a lower interest rate regime would not only revive local industries but also provide much-needed relief to the export sector, helping it compete more effectively in global markets. He urged policymakers to adopt a forward-looking approach to interest rates to unlock the full potential of Pakistan’s industrial and economic sectors.
