Lahore (Web Desk): United Business Group (UBG) Patron-in-Chief SM Tanveer has urged the State Bank of Pakistan (SBP) to substantially lower the key interest rate to 6 percent.
This demand follows the latest economic data revealing that the Consumer Price Index (CPI) dropped to just 3 percent in August 2025—an unprecedented low that has triggered growing calls for monetary easing from various segments of the economy.
Tanveer emphasized that the central bank’s decision to keep the interest rate at 11 percent despite the sharp fall in inflation has raised serious concerns within the business and economic community. He warned that the current high interest rate, in relation to the low inflation rate, has created a dangerously large real interest rate gap. This, he argued, is severely constraining industrial activity and hindering overall economic momentum.
He stressed that maintaining such a wide disparity between inflation and the policy rate is no longer defensible from an economic standpoint. According to Tanveer, a reduction in the interest rate would have far-reaching positive effects—including revitalizing the industrial sector, supporting job growth, making exports more competitive, and lowering the cost of government borrowing, particularly with the public debt now exceeding Rs 3.5 trillion.
Tanveer further urged the SBP to reconsider its current stance and act promptly by reducing the policy rate to a minimum of 6 percent. Tanveer highlighted that such a move would not only restore investor confidence but also send a strong signal of stability and growth potential to both local and international stakeholders.
He also appealed to Chambers of Commerce, trade bodies, and business leaders nationwide to collectively push for an economic policy shift that prioritizes growth and productivity. He called for a united front to advocate for a strategy that supports businesses, empowers the workforce, and fosters long-term national prosperity.
As Pakistan marks this significant milestone in bringing inflation under control, Tanveer questioned whether the government and monetary authorities will rise to the occasion and align their policies with the new economic reality.
He concluded by saying that the entire business community—and the nation at large—is watching closely, expecting decisive action that would steer the country toward sustainable development.