As the State Bank of Pakistan (SBP) prepares to announce its monetary policy on September 12, economists and business leaders are optimistic about a potential third consecutive decrease in interest rates.
Economists are anticipating a possible 1.5% cut in the interest rate, which currently stands at 19.5%.
This would mark the third consecutive decrease in recent months, with the central bank already having lowered rates by a total of 2.5% in its last two monetary policies.
The decision to adjust the interest rate will be based on a comprehensive review of economic indicators, including inflation, which has seen a notable decline.
After three years, Pakistan’s inflation rate has fallen to 9.6%, a single-digit figure that has fueled optimism among financial experts and businesses.
Many in the business community, including the All Pakistan Textile Mills Association (APTMA) and the Karachi Chamber of Commerce, are calling for a more substantial cut of 4-5%.
They argue that the current base interest rate is significantly higher than the inflation rate, by a margin of around 10%, and that a larger reduction would provide relief to industries and promote economic growth.