Karachi: The President of the Karachi Chamber of Commerce and Industry (KCCI), Muhammad Jawed Bilwani, has voiced concerns over the State Bank of Pakistan’s recent decision to lower the interest rate by 2.5 percent to 15 percent, arguing that it does not sufficiently reflect the current downward trend in inflation. Bilwani criticized the modest reduction, advocating for more significant cuts to stimulate economic growth and alleviate financial pressures on businesses.

According to Karachi Chamber of Commerce and Industry, Bilwani emphasized that while the reduction to 15 percent from 22 percent over four consecutive cuts was a step in the right direction, a reduction of at least 5 percent was necessary to match the pace of declining inflation rates, which have now dropped to single digits. He suggested that an ideal rate would be between 5 and 7 percent, more in line with other countries in the region and globally.

The KCCI President pointed out that lower interest rates would foster business expansion by reducing borrowing costs, which would in turn boost the overall economy. He acknowledged that the current inflation decrease was influenced more by government administrative measures, improved agricultural outputs, and falling international oil prices rather than solely by the central bank’s policies. Bilwani also highlighted the rupee’s stability as a crucial element in controlling inflation, noting that any devaluation directly impacts inflation rates due to Pakistan’s heavy reliance on imported goods.

Bilwani concluded with a call for continued interest rate reductions in upcoming reviews, reflecting the business community’s desire for more supportive fiscal measures from the State Bank of Pakistan.