Muhammad Kamran Arbi, President of the Site Association of Industry (SAI), has criticized the State Bank of Pakistan’s (SBP) recent 2% cut in the interest rate, arguing that a more substantial reduction to single digits is necessary, along with a long-term, sustainable monetary policy.

He stated that the recent cut did not meet expectations given the current economic conditions and that only a significant rate reduction would provide businesses with a more stable environment for future planning.

While acknowledging the SBP’s rate cut as a positive move, Arbi dismissed it as insufficient. ‘‘It’s a baby step,’’ he said, emphasizing that the SAI is calling for reducing interest rates to single digits.

Arbi also called for clearer communication from the government, noting, ‘‘When the interest rate is reduced to single digits, businesses need a clear roadmap. This will enable businesspeople to plan without further uncertainty regarding future investments.’’

He pointed out that inflation has already dropped to single digits, resulting in a real effective interest rate of approximately 10-11%. Arbi criticized the SBP for its slow response to changing economic conditions and urged a more substantial and immediate rate cut, or at least a gradual reduction of 5 percentage points. According to Arbi, the SBP should prioritize quantitative easing to stimulate economic growth.