Prominent business leader and Patron-in-Chief of the United Business Group (UBG), S.M. Tanveer Hussain, has urged the State Bank of Pakistan (SBP) to bring interest rates down to single digits as the central bank gears up to announce its monetary policy on July 30.

Tanveer argued that a substantial reduction in the policy rate is crucial to reviving Pakistan’s economy.

“Single-digit interest rates are essential for economic growth and development,” he said.

“It’s time for the State Bank of Pakistan to take bold action and reduce interest rates to single digits.”

Tanveer emphasised the need for aggressive policy moves to accelerate economic recovery and stimulate industrial activity.

“There is an urgent need to reduce the interest rate to 6% to stimulate economic growth,” he said, adding that the existing 11% policy rate is misaligned with current macroeconomic indicators.

Referring to the latest economic data, Tanveer pointed out that inflation has already dropped to 4% while the Consumer Price Index (CPI) stands at just 0.3%. “These numbers clearly show that the current interest rate is too high,” he said.

According to Tanveer, slashing the interest rate would significantly benefit the economy by lowering borrowing costs for businesses, enhancing export competitiveness, and saving the government an estimated Rs3.5 trillion in debt servicing costs.

While analysts expect a moderate cut of 1 to 1.5 percentage points in the upcoming policy announcement, Tanveer believes this would be insufficient. “We need bold decisions, not half-measures,” he asserted.

The business community is watching the SBP’s decision closely, hoping it will offer a much-needed boost to industrial activity and investor confidence. With inflation expected to remain under control, Tanveer reiterated that the current environment presents a timely opportunity for the SBP to support growth-oriented monetary policy.