KARACHI: The president of the Korangi Association of Trade and Industry on Saturday urged the State Bank of Pakistan to cut its benchmark interest rate to single digits at its next Monetary Policy Committee meeting, saying high borrowing costs are choking industrial growth.
Sheikh Umer Rehan said high interest rates are adding to financial pressure on industry, raising production costs and discouraging new investment. Without affordable financing, he said, industries will struggle to expand capacity, set up new manufacturing units, create jobs and increase exports.
Rehan said industrialists already face high electricity and gas tariffs, costly raw materials and a heavy tax burden. Expensive bank loans add to those costs and weaken the competitiveness of Pakistani goods in domestic and international markets, he said.
He called on the central bank to weigh the needs of the industrial sector, investment trends and prevailing business costs when setting monetary policy. A suitable reduction in rates, he said, would allow industries to expand, invest in modern technology and generate employment, supporting sustainable economic growth.
Rehan also stressed the need for affordable credit for small and medium-sized enterprises, which he described as vital to industrial development, job creation and the national economy.
He appealed to SBP Governor Jameel Ahmad and members of the Monetary Policy Committee to adopt a clear strategy for gradually lowering interest rates while considering the concerns of the business community.
A lower policy rate would help speed industrialization, restore investor confidence and put the economy on a path toward sustainable growth, Rehan said.
