KCCI Calls for More Significant Interest Rate Cuts Amid Modest Decrease by SBP

Karachi, Iftikhar Ahmed Sheikh, President of the Karachi Chamber of Commerce and Industry (KCCI), has expressed disappointment over the State Bank of Pakistan's (SBP) recent decision to lower the interest rate by only 1.5 percent to 20.5 percent. The business community had anticipated a more substantial cut, in the range of 4 to 5 percent, in response to declining inflation trends.

According to Karachi Chamber of Commerce and Industry, the modest reduction falls short of expectations given the significant decrease in inflation, which has dropped from a high of 38 percent to just above 11 percent. Sheikh attributed this decline not to the central bank's policies but to government administrative measures, improved agricultural outputs, and reductions in petroleum prices. He noted that the stabilization of the Pakistani rupee, aided by crackdowns on illegal dollar trading and smuggling, also played a crucial role in curbing inflation. Looking forward, Sheikh remains hopeful that the SBP will continue to ease monetary policy to eventually bring the interest rate down to a single digit, aligning with international trends and potentially boosting private sector borrowing, business expansion, and industrialization.