Karachi: Leaders from the United Business Group (UBG), including President Zubair Tufail and several other central figures, have made a strong appeal to the government to reduce interest rates by 4 to 5 percent. This significant reduction is proposed in the forthcoming monetary policy with the aim to energize export-oriented industries and increase export activities, which are crucial for economic expansion.

According to United Business Group, reducing the interest rates as proposed would foster considerable economic benefits. It would increase job opportunities across sectors including industry, trade, and agriculture, leading to a surge in industrial investments. This change is especially timely given the recent dip in the inflation rate to 9 percent. A reduction in interest rates would likely boost production and exports, expand employment opportunities, and enhance the overall economic activity. Such economic improvements would result in lower prices for goods and improve the purchasing power of the general populace, setting the stage for broader economic prosperity.

The call for a rate cut supports the position of UBG’s patron-in-chief, SM Tanveer, who has highlighted that a 400-basis point reduction in interest rates would benefit the entire nation. The UBG leaders pointed out that persistent rate hikes have adversely affected the industrial sector, particularly impacting small and medium-sized enterprises (SMEs), which are either struggling or shutting down, while larger industries are also experiencing contraction. Given that SMEs are crucial to the economy’s backbone, a favorable financial environment is essential for their growth and contribution to the national economy. Additionally, a reduction in interest rates could help mitigate inflation, providing much-needed relief to the impoverished segments of the population.