Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), Muhammad Aman Pracha, has urged the federal government to reduce the policy rate by up to 300 basis points to promote economic growth.

In a statement, Aman Pracha said that a reduction in the policy rate could boost the economy and benefit all sectors. He added that there is an urgent need for the State Bank of Pakistan to announce at least a 3 percent cut in the interest rate in its upcoming monetary policy meeting, as a significant reduction in the policy rate is essential for further economic growth.

The FPCCI Vice President stated that a 300-basis-point cut in the policy rate would increase economic activity, benefit the government, and further strengthen local investors’ confidence. At the same time, it would also encourage foreign investment, which is vital for the economy.

Muhammad Aman Pracha also said that the Consumer Price Index (CPI) has declined significantly, which is a positive development and evidence of the resilience of the business community. A timely reduction in the policy rate would be a clear sign of improved economic stability, and this cut would make it easier for businesses and consumers to obtain loans.

He said that a reduction in interest rates would promote investment, increase economic activities, and play an important role in the country’s overall prosperity.

Aman Pracha added that reports of keeping the interest rate unchanged at 11 percent ahead of the monetary policy meeting are spreading disappointment, especially when local and foreign investment in the country is already negligible.