Islamabad 29 July: As Pakistan’s central bank prepares its monetary policy announcement, prominent business leader S.M. Tanveer has made an urgent appeal for deep interest rate reductions to single-digit levels.
Tanveer, Patron-in-Chief of the United Business Group (UBG), argued that with inflation cooling to 4% and monthly CPI at just 0.3%, the current 11% policy rate has become unsustainable. “A bold reduction to 6% would be transformative,” he stated, noting such a move could save the government Rs3.5 trillion while boosting industrial activity and export competitiveness.
The call comes as analysts anticipate a more modest 1-1.5% cut from the State Bank of Pakistan (SBP) during its July 30 Monetary Policy Committee meeting. Tanveer emphasized that single-digit rates are now “essential for economic revival,” citing favorable price stability conditions.
Current vs Proposed Rates:
| Financial Indicator | Current Rate | Proposed Rate |
| Policy Rate | 11% | 6% (proposed) |
| Inflation (YoY) | 4% | – |
| CPI (Monthly) | 0.3% | – |
Business leaders across sectors have rallied behind the proposal, suggesting the timing aligns perfectly with stabilizing macroeconomic indicators. The SBP’s decision could determine whether Pakistan capitalizes on current inflation trends to stimulate growth or maintains a more cautious approach.
Economic observers note that while some reduction appears certain, the scale of cuts remains contentious between conservative policymakers and growth-oriented business circles. Wednesday’s announcement is expected to trigger significant market reactions either way.
