Sheikh Umer Rehan Calls for Interest Rate Cut to Boost Economy

KARACHI: The Chairman of the Pakistan Vanaspati Manufacturers Association, Sheikh Umer Rehan, has called on the State Bank of Pakistan to lower the policy interest rate to 6% amid signs of economic improvement. He argued that the current 11% rate is stifling industrial growth and employment.

Rehan highlighted that with inflation falling to 3.2%, foreign reserves exceeding $12 billion, and a stable exchange rate, conditions are favorable for a rate cut. He noted that other regional countries maintain interest rates between 6% and 8%, supporting their industrial sectors.

The high borrowing costs are particularly affecting the edible oil industry, which depends on imported raw materials, Rehan pointed out. The financial burden is leading to challenges in managing working capital and maintaining production levels.

Rehan warned of potential closures of small and medium enterprises if financial relief is not provided, which could exacerbate unemployment and economic problems. He advocated for financial policies that support industry and investment, emphasizing the need for concessional loan schemes.

He concluded that reducing the interest rate would help industries manage costs, boost production, and align with national economic objectives, including export growth.