KARACHI: In light of the sharp slowdown in inflation to 4.86 percent in November, Muhammad Jawed Bilwani, president of the Karachi Chamber of Commerce and Industry (KCCI), has urged the State Bank of Pakistan (SBP) to lower the policy rate by 400 basis points at the next meeting of the Monetary Policy Committee (MPC).
He added in a statement that significant policy rate decreases will bring real interest rates closer to sustainable levels and lower borrowing costs for individuals and companies.
He pointed out that following more than two years of rising inflationary pressures, the November decline in inflation represented the fourth straight month of single-digit inflation. Since June, the SBP has lowered the policy rate from 22% to 15%.
He added that the high interest rate still hinders the growth of private sector credit and stifles economic activity, putting Pakistan at a competitive disadvantage. In contrast, the current interest rate is still relatively high when compared to regional peers like Bangladesh (10pc), Vietnam (4.5pc), and India (6.5pc).
