Karachi: Key figures from the United Business Group, including its president, Zubair F. Tufail, and former senior vice president of FPCCI, Mazhar Ali Nasir, have called on the Monetary Policy Committee of the State Bank of Pakistan to cut interest rates by 400 to 500 basis points in its upcoming meeting on Monday. The group argues that such a reduction is necessary to improve the competitiveness of Pakistan’s business sector in the global market.

According to United Business Group, Zubair Tufail highlighted the challenges faced by the Pakistani business community, including high costs and difficulties in doing business and accessing finance. He pointed out that the current interest rates are disproportionately high relative to the fundamental inflation rate, adversely affecting private sector lending, which is notably lower in Pakistan than in other emerging markets. Tufail cited that private sector lending constituted only 12.0% of GDP as of 2023, a factor that has negatively impacted the country's industrial and export sectors despite successful inflation control by the State Bank.

Mazhar Ali Nasir supported the call for interest rate reductions, noting that UBG’s patron-in-chief, S.M. Tanveer, has long advocated for lower rates to ease the financial burden on exporters and industrialists. Nasir urged the Monetary Policy Committee to reduce the interest rate to 12.5%, asserting that such a measure would decrease the cost of capital for Pakistani exporters and enhance their competitiveness in regional and international markets. He emphasized that lowering interest rates is crucial for reviving economic activities, increasing government revenue, and creating more job opportunities.