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LAHORE, Jun 11 (APP):SAARC Chamber of Commerce and Industry’s former president Iftikhar Ali Malik said here Tuesday that reduction in the policy rate by State Bank of Pakistan would provide much-needed relief to businesses and industries by lowering borrowing costs.
He added that it would not only help in sustaining current operations but also encourage new investments, fostering economic growth and job creation.
He emphasized that it would enhance liquidity in the market, making credit more accessible to small and medium enterprises (SMEs) which are the backbone of the economy. He described the move as a significant step towards stabilizing the economic landscape of Pakistan, which is facing a myriad of financial challenges.
Malik pointed out that this decision could potentially boost consumer spending by reducing the interest burden on loans and it would also have a positive impact on aggregate demand, which has been subdued in recent times due to high inflation and economic uncertainty. He suggested that the SBP’s move could help in stabilizing the exchange rate by attracting foreign investment, given the more favorable interest rate environment.
He expressed optimism that the reduction would pave the way for a more robust and resilient economic recovery. He urged the government and relevant stakeholders to support this initiative with complementary policies aimed at sustainable economic development.
While acknowledging the positive aspects of the rate cut, Malik also cautioned that it must be accompanied by structural reforms to ensure long-term economic stability. He also called for addressing the underlying issues such as fiscal deficits, inflationary pressures, and improving the overall business environment