Pakistan Vanaspati Manufacturers Association (PVMA) Chairman, Sheikh Umer Rehan, has strongly urged the government and the State Bank to reduce the interest rate by 500 basis points (5%) in the upcoming Monetary Policy Committee (MPC) meeting on November 4. Sheikh Umer emphasised that the policy rate should be swiftly brought down to single digits in the next committee meeting to support economic stability and ease financial pressures on businesses.

He highlighted the recent dip in inflation, which reached 6.3% in October, while the real interest rate currently stands at 10.2%. Citing these indicators, he advocated for an immediate reduction in the interest rate from 17.5% to 12.5% to align it with inflation and the real interest rate, making financing more accessible for industry and business.

The PVMA chairman stressed that bringing the policy rate to single digits is crucial to reducing the cost of borrowing, encouraging investments, and making bank loans affordable. Such a move, he argued, would foster sustainable growth and ease financial strain on businesses.

Sheikh Umer Rehan also addressed the urgent need for the government to resolve issues with Independent Power Producers (IPPs) to ensure stable and affordable energy supplies for industries. He suggested that diplomatic dialogue could convince international stakeholders, like Germany, to support Pakistan’s economic stability by foregoing additional IPP profits during challenging times. Pakistan has consistently fulfilled payment obligations under IPP agreements.