The State Bank of Pakistan (SBP) is considering reducing the interest rates post the two percent reduction in inflation in the country. The likelihood of this is a welcome sign for the business community in Pakistan, that has been affected due to these figures. Bringing down the interest rates helps ease out the tensions in the business community and will also help provide the sector with a very significant boost at a time when the economy is struggling. The meeting is said to be held on Tuesday, and according to Governor SBP Reza Baqir, there are speculations that as headline inflation has come down from 14.6 percent in January to 12.4 percent in February 2020, the SBP may review the policy rate in the next monetary policy committee meeting.

For the longest time, the business community has looked towards parties like the Pakistan Muslim League Nawaz (PML-N) to introduce business-friendly policies, and since day one in government, Pakistan Tehreek-i-Insaaf (PTI) has been labelled to do the opposite. It is important to gain the trust of the local market in order to not only help them improve their output but also to be able to help the government devise better and market-friendly policies that reduce the impact and create opportunities for revenue collection for the government as well.

The government also needs to ensure that a reduction is not the result of criticism because any ad-hoc measure is likely to be affected by market changes and will develop another critical situation for the government if they decide to revert the policy. Pakistani market is currently being influenced by a lot of variables and the government needs to put its best foot forward in order to help their policies benefit the masses, particularly the local businesses and industry.