The Korangi Association of Trade and Industry (KATI) President Junaid Naqi welcomed the State Bank of Pakistan’s recent 2.5% interest rate cut, calling it a positive step but emphasizing the need for further reductions to bring the rate down to single digits for sustainable economic growth. Naqi highlighted that the current high-interest rate has been counterproductive, slowing economic activity and limiting industrial capital availability, and urged that a lower policy rate would help revitalize the economy.

Naqi addressed concerns about the potential for increased imports following interest rate cuts, which could pressure the currency and trade balance. He recommended that the government take proactive steps to control imports to protect the rupee’s value. Although the rupee has remained stable, Naqi noted that an undervalued currency isn’t beneficial for exporters. He advocated for a balanced approach that aligns currency value with economic fundamentals, growth targets, and foreign exchange reserves, helping ensure a fair playing field for exporters.

The KATI President concluded by urging the government to adopt a long-term policy to bolster the rupee’s value and interest rate environment. He believes this would bring long-term advantages to the industry, especially the export sector.