LCCI lauds SBP’s decision to reduce discount rate

LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has appreciated the State Bank of Pakistan’s decision to reduce the discount rate.

This significant move aligns with LCCI’s consistent demand and is being viewed as a much-needed relief for the business community but it must be at single digit.

The decision is expected to lower the cost of borrowing, stimulate industrial growth and create a more favorable environment for trade and investment in the country.

In a statement, LCCI President Mian Abuzar Shad and Vice President Shahid Nazir Chaudhry hailed the decision as a progressive step toward addressing the economic challenges faced by the business community. They noted that high interest rates had long been a significant obstacle, making borrowing unaffordable for businesses, especially small and medium enterprises (SMEs).

The rate cut will ease this burden, enabling businesses to access credit on more favorable terms, thereby enhancing productivity and fostering economic stability.

The LCCI leadership highlighted that the timing of this decision is particularly critical, given the rising input costs and inflationary pressures that have constrained business activities.

The reduction in the discount rate is expected to improve cash flow for industries, stimulate investment and boost export competitiveness. By alleviating financial strain, the move will encourage businesses to expand operations and create new employment opportunities, contributing to economic recovery.

While welcoming the SBP’s proactive approach, the LCCI urged the government and the central bank to take additional steps to further strengthen the economy. These include addressing energy costs to reduce production expenses, introducing tax reforms to ease the financial burden on businesses and providing targeted support to SMEs. The business community also emphasised the importance of continued engagement with stakeholders to resolve structural economic challenges effectively.

The LCCI leaders emphasised that the decision marks a step in the right direction for reviving investor confidence and promoting sustainable growth. They also called on commercial banks to extend the benefits of the reduced discount rate by lowering their lending rates for businesses, especially for SMEs and startups, which play a vital role in driving economic activity.

Copyright Business Recorder, 2025