President Hyderabad Chamber of Small Traders & Small Industry (HCSTSI), Muhammad Saleem Memon, has termed the Monetary Policy announced by the State Bank of Pakistan on May 5, 2025, as a cautious yet positive step. He appreciated the government and the State Bank for taking measures to curb inflation, control the current account deficit and improve foreign exchange reserves, calling these developments encouraging signs for the country’s economic direction.
He stated that compared to previous months, Pakistan’s economic indicators have shown notable improvement, including a decline in inflation, a rise in remittances, and a significant reduction in the trade deficit. However, Mr. Memon expressed concern that despite these positive trends, the State Bank has only reduced the interest rate by 1%, which is insufficient to support investment and stimulate business activity.
HCSTSI President recalled that last year, during meetings between various trade bodies including the HCSTSI and the Federal Finance Minister, a firm commitment was made to bring down the interest rate to a single-digit level. The business community was assured twice: first, that the rate would be lowered by December 2024, and later extended to June 2025. Yet, despite clear progress on inflation control, a stabilized current account, rising remittances, and strengthened foreign reserves, no substantial cut in the interest rate has been made a move that has deeply disappointed the business community.
He further emphasized that the IMF’s own guidelines for Pakistan’s economic framework stressed the need for a balanced relationship between inflation and interest rates. Given the current and projected inflation levels, he argued that, by both global and domestic standards, the policy rate should not exceed 8%. He urged the State Bank to act without further delay and bring the interest rate down to a range of 7% to 8% to align with economic realities.
He highlighted that the prevailing high-interest rate remains a serious burden for small and medium enterprises (SMEs), increasing the cost of doing business and stalling new investments. At a time when economic indicators are on a path to recovery, markets are stabilizing, and efforts are underway to revive industrial production, maintaining such a high rate is both irrational and detrimental to business confidence.
Chamber President Saleem Memon made a strong appeal to the Prime Minister of Pakistan, the Federal Minister for Finance, and the Governor of the State Bank to immediately reduce the interest rate to at least 7%–8%. He stressed that such a move is essential to revitalize trade, encourage industrialization, boost exports, and create employment opportunities for millions. He concluded by saying that now is the time to transform all economic policies into business-friendly strategies so Pakistan can move towards a strong, stable, and self-reliant economy.
