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LAHORE, Jul 30 (APP): SAARC Chamber of Commerce and Industry former President, Iftikhar Ali Malik Wednesday urged the State Bank of Pakistan (SBP) to gradually reduce the policy rate and bring it down to a single digit.
In a media statement issue here, he highlighted that reducing the policy rate would enable businesses, especially small and medium enterprises (SMEs), to access loans at lower costs. This would boost economic activity, create employment opportunities, and enhance exports. He stressed that the current high-interest rate is non-lucrative to investment and places an excessive financial burden on industries already struggling with inflation and economic challenges.
He urged policymakers to adopt business-friendly monetary policies to support local industries and promote economic stability.
He also pointed out that regional competitors offer lower borrowing rates, making Pakistani industries less competitive in the global market.
Calling for a gradual reduction, Iftikhar Ali Malik suggested that lowering the policy rate would restore investor confidence and attract foreign direct investment (FDI). He reiterated that a stable and growth-oriented economic policy is crucial for Pakistan’s economic revival and long-term sustainability.
Highlighting Pakistan’s struggle with inflation, sluggish growth, and low industrial productivity, he noted that accessible credit could spur sectors like manufacturing, agriculture, and exports, which are critical for economic stability. He suggested that Pakistan should adopt global approach and a similar strategy to counter rising input costs and stagnant demand.
Malik argued that high borrowing costs under the current monetary policy have stifled business expansion, hampered job creation, and limited access to affordable financing for industries, particularly small and medium enterprises (SMEs). He emphasized that lowering the policy rate would reduce loan costs, enabling businesses to invest in modernization, scale operations, and enhance competitiveness amid persistent economic challenges.