HYDRABAD: Muhammad Saleem Memon, President, Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), has appreciated the State Bank of Pakistan (SBP) for its decision to reduce the policy rate by 250 basis points.
He stated that the SBP, recognizing the challenges facing Pakistan's economy, industrial growth and small business sector, has made a welcome move that will reduce the cost of doing business in Pakistan and boost investor confidence.
HCSTSI President commended the SBP's decision to bring the policy rate down from 17.5% to 15%, describing it as a praiseworthy step with positive implications for the economy.
He emphasized that key factors contributing to this decision include a substantial drop in inflation, a sharp decrease in food prices, lower global oil rates and the absence of anticipated hikes in the Petroleum Development Levy (PDL) and gas tariffs.
This reduction in the policy rate, he noted, will positively impact Pakistan’s economy by enhancing industrial production, reducing financial costs for businesses and providing financial support to small and medium-sized enterprises (SMEs). Small traders will also find it easier to access credit, leading to accelerated business activities and more job opportunities.
Chamber President highlighted that several Asian and European countries maintain interest rates in single digits, creating a favorable environment for their business communities and ensuring economic stability. To foster similar growth, Pakistan should also work towards bringing the interest rate within single digits, which would offer additional convenience to business people and investors, ultimately fostering economic progress.
He noted that the SBP’s timing is especially strategic, as recent surveys indicate that inflation dropped to 7.2% in October 2024, down from 9.6% in August 2024, marking the first single-digit inflation rate in over three years. This decision by the SBP will pave the way for sustainable growth and stability, injecting new vigor into the economy.
The HCSTSI President expressed optimism that the Government of Pakistan and the SBP will take joint measures to further stimulate economic activities and encourage investment within the industrial and trade sectors.
Copyright Business Recorder, 2024
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