QUETTA: As the Monetary Policy Committee convenes on Monday to announce the new policy rate amid speculations that the State Bank of Pakistan (SBP) will take a cautious approach to cut the policy interest rate despite significant room for a cut due to declining inflation, traders and businessmen urged the government to reduce it by 500 basis points in one go to support economic growth.

A considerable reduction has become the need of the hour as it would help bring bank mark-up rates back to single digits, making credit more affordable for businesses and consumers alike, said Chairman of FPCCI’s Pakistan-Iran Business Council Asfandyar Khan Mandokhail.

Speaking to the media here on Sunday, Mr Mandokhail, who is also convener of FPCCI’s Central Standing Committee for Halal Products and Services, has said a substantial reduction in the policy rate would not only stimulate economic activities but also benefit the government.

An undue delay would lead to unnecessary loss to the country’s economy, especially when the government was also seriously considering bringing policy rates down to single digits, he added.

“A timely action would mark a notable improvement in our economic stability and demonstrate the effectiveness of our recent policy measures,” he said.

He explained that lower interest rates would stimulate investment, boost economic activity, and contribute to the overall prosperity of our nation.

He said that the Consumer Price Index (CPI) for November 2024 had already been reduced to 4.9pc year-on-year (YoY), compared to 7.2pc in the previous month.

Mr Asfandyar, who is also vice chairman of the United Businessmen Group (UBG) of Balochistan, said the actual inflation rate had outperformed all predictions, and this positive development was a testament to the diligent efforts of economic planners and the resilience of our business community. “We remain committed to supporting policies that foster economic growth, stability, and prosperity for all,” he said.

He said they would continue to work closely with the government, industry stakeholders, and international partners to sustain and build upon these gains.

Published in Dawn, December 16th, 2024