The Salt Manufacturers Association of Pakistan (SMAP) on Saturday urged the Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) to consider a significant reduction of 3–4% in the policy interest rate during the upcoming monetary policy review on Wednesday, July 30.
“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,” SMAP chairperson Saima Akhter was quoted as saying in SMAP statement.
Meanwhile, Ismail Suttar, SMAP founder chairman, said Pakistan’s persistently high interest rate “remains a critical barrier to industrial and commercial activity”.
SMAP statement added that a sharp reduction in the policy rate was essential to stimulate private sector investment, revive growth, and set the stage for a broad-based economic recovery says Ismail.
Suttar was of the view that high borrowing costs had severely constrained working capital, particularly for small and medium sized enterprises (SMEs).
“Reduced interest rates will ease this pressure and unlock the productive capacity of countless businesses.”
The association said affordable financing would 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 [gross domestic product]. This is the most sustainable path to reducing fiscal deficits and strengthening the rupee,” Suttar said.
The central bank, in its previous MPC held on June 16, decided to keep the policy rate unchanged at 11%.
Analysts believe the central bank may decide to cut the policy rate by 50 basis points (bps) in its upcoming meeting scheduled for Wednesday – the first MPC meeting of the fiscal year 2025–26.
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