Policy interest rate: SMAP urges MPC to consider significant cut

KARACHI: The Salt Manufacturers Association of Pakistan (SMAP), on behalf of its members and the wider industrial community, respectfully urges the Monetary Policy Committee (MPC) of the State Bank of Pakistan to consider a significant reduction of 3–4% in the policy interest rate during the upcoming monetary policy review.

After extensive deliberations and strategic discussions on trade and economic challenges, the Salt Manufacturers Association of Pakistan (SMAP), under the leadership of Chairperson Saima Akhter, has reached a unanimous conclusion: a minimum reduction of 3% in the interest rate is essential to bring about a meaningful and positive shift in the ease of doing business across the country.

As the business community continues to grapple with unprecedented economic challenges rising energy costs, low demand, and tight liquidity. Pakistan’s persistently high interest rate remains a critical barrier to industrial and commercial activity says Ismail Suttar, Founder Chairman of the Salt Manufacturers Association of Pakistan.

A sharp reduction in the policy rate is essential to stimulate private sector investment, revive growth, and set the stage for a broad-based economic recovery says Ismail. He highlighted that high borrowing costs have severely constrained working capital, particularly for SMEs. Reduced interest rates will ease this pressure and unlock the productive capacity of countless businesses.

Moreover, affordable financing will allow manufacturers including Pakistan’s salt processing industry to invest in technology upgrades, scale operations, and enhance export competitiveness. When businesses thrive, they create jobs, generate tax revenue, and contribute to GDP. This is the most sustainable path to reducing fiscal deficits and strengthening the rupee says Founder Chairman SMAP.

The business community recognizes and respects the SBP’s mandate to maintain price stability. However, the current macroeconomic context demands a shift toward growth-oriented monetary policy that empowers industries rather than stifles them. Without accessible and affordable capital, Pakistan’s economic recovery will remain sluggish.

The Salt Manufacturers Association of Pakistan urges the MPC to prioritize business sustainability, industrial growth, and employment generation in its policy deliberations. A downward adjustment in the interest rate would send a strong signal of support to Pakistan’s productive sectors and restore confidence in the economy.

Copyright Business Recorder, 2025