President Karachi Chamber Rehan Hanif Urges SBP to Implement Meaningful & Gradual Interest Rate Cuts

The Karachi Chamber of Commerce & Industry (KCCI) has expressed deep concern over the State Bank of Pakistan’s (SBP) recent policy rate adjustment of only 0.5 percent, emphasizing that it falls far short of the business community’s expectations and the urgent requirements of the economy.
President KCCI, Muhammad Rehan Hanif, stated that the chamber had demanded a one percent reduction in the policy rate; however, the SBP’s decision fulfills only half of that demand. “This half-hearted cut provides minimal relief to businesses and does not align with the economic realities of the country,” he remarked.
He further highlighted that, based on current inflation figures, the policy rate should ideally have been brought down to single digit. The evident mismatch between reported inflation and the policy rate raises questions about either the accuracy of the government’s inflation data or the rationale behind the current interest rate, creating significant uncertainty for investors and industrialists alike.
“While we understand that reducing the policy rate to single digits in one go may not be feasible, the SBP must commit to a gradual reduction with every forthcoming policy announcement,” Rehan Hanif added.
President KCCI recalled that a year ago, the government had promised to bring the policy rate down to single digits. “That promise remains unfulfilled. Considering regional benchmarks, the ideal rate for Pakistan should be between 6 to 7 percent. If that is deemed unrealistic, the wiser approach would be to gradually reduce it to 9 percent,” he suggested.
President KCCI reaffirmed the business community’s readiness to support efforts for economic stabilization but emphasized that stability must go hand in hand with growth. “Pakistan needs bold and decisive policy measures, starting with meaningful interest rate reductions, to unlock growth, protect jobs, and enhance competitiveness,” he concluded.