President of the Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), Muhammad Saleem Memon, has strongly urged the State Bank of Pakistan (SBP) to immediately bring down the prevailing 11% policy rate to single digits. He emphasized that the current rate remains exceptionally high and is one of the biggest hurdles to economic recovery and sustainable business growth.
Saleem Memon stated that based on international standards, current inflation trends, and the overall economic condition of the country, the policy rate should ideally be around 6%. However, considering the prevailing circumstances, the government must at least bring it below 9% without delay to inject much-needed momentum into Pakistan’s industrial, commercial, and export sectors.
He pointed out that the government itself is heavily indebted to banks and is currently spending over Rs. 8.5 trillion annually just in interest payments. A 2–3% reduction in interest rates could save the government approximately Rs. 1.5 to 2 trillion annually. These funds could be redirected towards critical sectors, such as education, healthcare, and infrastructure, and especially for direct support to small traders and businesses. This would be a significant relief at a time when the country is facing severe financial challenges both internally and externally.
The HCSTSI President also expressed concern over the interest rate disparity between Pakistan and its regional competitors, such as Bangladesh, Vietnam, and India. He said these countries offer significantly lower financing costs to their industries, which has enabled them to scale up exports far more effectively than Pakistan. In the textile sector, especially, Vietnam and Bangladesh have rapidly expanded their global market share, while Pakistan’s export industry continues to suffer due to expensive financing and high cost of doing business.
Saleem Memon acknowledged that although the State Bank has made some rate cuts in recent months, the 11% benchmark is still too high to incentivize investment. As long as interest rates remain in double digits, businesses will be unable to access affordable financing, resulting in sluggish investment, limited job creation, and constrained economic growth.
He reminded the authorities that HCSTSI has repeatedly drawn the attention of the State Bank and the Ministry of Finance towards the need for a substantial reduction in the policy rate. “Countries that maintained single-digit interest rates have witnessed increased investment, higher exports, and broader employment opportunities,” he said.
In conclusion, HCSTSI President Saleem Memon made a strong appeal to the government and the SBP to adopt a phased approach to reduce the interest rate to 6%, starting with an immediate reduction below 9%. He stressed that such a move would not only ease the burden of government borrowing but also provide major relief to ordinary citizens, industrialists, traders, exporter,s and potential investors. “Now is the time for the government to shift from harsh monetary policies towards more pragmatic, business-friendly, and people-oriented economic decisions,” he concluded.
