Karachi: Zubair Tufail, President of the United Business Group, has called for the State Bank of Pakistan to lower its policy rate by 100 basis points, following a recent decision by the United States to reduce its interest rate by 25 basis points.

In a statement from the group's central spokesperson, Gulzar Firoz, Tufail expressed concern over the State Bank's decision to maintain the policy rate at 11%. He noted that this decision has led to disappointment within Pakistan's business community. Many investors, who were considering new projects, are now hesitant due to the high interest rates.

Tufail emphasized that the business community has consistently advocated for a reduction in interest rates to single digits to foster industrial growth. However, the central bank has not responded to these calls, causing frustration in the sector.

He argued that a reduction in the policy rate would enable industrialists to secure bank loans for purchasing new machinery, which would enhance production and create jobs. The current rates, according to Tufail, have stifled investment and industrial progress.

He warned that continuing with the current policy rate could further erode business confidence and harm the overall economy.

Citing international developments, Tufail highlighted the U.S. Federal Reserve's recent interest rate cut to a range of 3.75% to 4.00%, alongside plans to resume limited Treasury securities purchases to address liquidity issues. He suggested that Pakistan should adopt similar measures.

Tufail concluded by urging the State Bank of Pakistan to implement a 1% rate cut promptly, without waiting for the next Monetary Policy Committee meeting.