Karachi: Junaid Naqi, President of the Korangi Association of Trade and Industry (KATI), has urged the State Bank of Pakistan to implement a significant reduction in interest rates ahead of the upcoming monetary policy announcement, citing the recent decrease in inflation rates and the need to stimulate economic growth.

According to Korangi Association of Trade and Industry, Naqi highlighted the necessity of lowering the policy rate by 4% to 13.5%, in response to the expected inflation decrease to 6.3% in October from 6.9% in September, as per government data. He emphasized that such a reduction is crucial for reviving industrial activities and aligns with the expectations of economists who advocate for interest rate adjustments proportional to inflation reductions.

Naqi pointed out that the industrial sector, particularly small and medium enterprises (SMEs) and large-scale manufacturing, which he described as the backbone of the economy, would benefit significantly from lower borrowing costs. This, in turn, would boost business activities, investments, and employment opportunities. Without such measures, he warned, economic growth, including that of large-scale manufacturing, could be adversely affected.

The KATI President also noted that reduced interest rates would increase consumer spending power, thereby enhancing demand and contributing to economic recovery. He appealed to the State Bank and the government to act swiftly, emphasizing that while the benefits of interest rate cuts may take time to permeate through the economy, immediate actions are essential to foster economic activities and boost exports.