Karachi: Captain Abdul Rashid Abro, a prominent figure in the Pakistan Business Forum and former Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has advocated for a significant reduction in interest rates to at least 5% in the upcoming monetary policy meeting set for November 4. Abro argues that this cut is vital for boosting trade and supporting exporters and industrialists under the current economic conditions.

According to Federation of Pakistan Chambers of Commerce and Industry, Abro emphasized that with the inflation rate at 6.9% in September, expected to decrease to 6.3% in October, there is a compelling case for lowering the current interest rate from 17.5% to 5%. He suggests that this adjustment is essential to sustain industrial activity and should further decrease to single digits by December.

Economic and financial experts support the notion that the reduction in inflation justifies a corresponding decrease in interest rates to maintain industrial momentum. Abro highlighted that such measures are crucial for aiding small and medium enterprises (SMEs) as well as large-scale manufacturing sectors, which are currently hindered by the high cost of borrowing.

Moreover, Abro pointed out that high interest rates at 17.5% are stifling trade activities and hindering the growth of exports. By reducing these rates, the government would not only foster new investments but also meet its inflation reduction targets, which are supported by the World Bank.