The Federation of Pakistan Chambers of Commerce & Industry’s Businessmen Panel (BMP) has emphasized that the central bank’s stringent monetary policy has adversely affected the businesses and economy for the last several years, stressing the needs to employ other policy tools to tame the economic volatility. Addressing a delegation of various trade and industrial associations, FPCCI former president and BMP Chairman Mian Anjum Nisar pointed out that despite the successful completion of IMF past several programs and high policy rate, Pakistan remains overwhelmed with issues of dwindling exports and economic instability. This phenomenon well-establishes the fact that the government needs to employ other policy tools to tackle the low growth of economy. He advocated for the lower markup rate to alleviate the financial burden on the business community and stimulate economic activity. The BMP Chairman urged the central bank to implement a substantial reduction in the monetary policy rate, terming the current meager reduction in key policy rate as very depressing disappointing for the trade and industry. The FPCCI former president said that the slash in discount rate announced recently was not enough to compete the regional countries, since the businessmen, was expecting a huge reduction in the monitory policy rate in line with the neighboring countries in view of decline in inflation, which has come down to single digit. He advised the State Bank of Pakistan to announce a substantial reduction in interest rate by at least 300 basis points to bring the existing interest rate down in the next monetary policy statement as the inflation continues to descend to reach 9.6 percent in August whereas the Moody’s recently upgraded local and foreign currency issuer and senior unsecured debt ratings to Caa2 from Caa3. Anjum Nisar highlighted that the tight monetary policy, combined with the government’s significant domestic borrowing, has left minimal room for business growth. He stressed the urgent need for the government to freeze both domestic and foreign borrowing and to devise a comprehensive strategy to showcase Pakistan’s economic potential to international investors. “The current low levels of domestic investment have sent negative signals to potential foreign investors,” Anjum Nisar said. “If the government is serious about achieving an economic turnaround, it must take immediate steps to address these issues.” He proposed a 300-500 basis points reduction in the policy rate, potentially bringing it down to 15 percent, a level last seen several years ago. This anticipated cut is supported by several favorable economic indicators, including a significant decline in inflation rates. On the external front, the current account deficit has improved remarkably, narrowing by 95 percent in the first two months of this fiscal year. This reduction has contributed to the stability of the rupee against the US dollar. The IMF emphasized the need to maintain a tight monetary policy for continued stability. However, the IMF suggested that this stance could be reassessed if inflation continues to decrease and the foreign exchange market remains stable. Anjum Nisar also pointed out a decline in yields for government securities in both primary and secondary markets since the last monetary policy announcement. In the primary market, yields across various tenors have decreased. Similar trends have been observed in the secondary market. He lamented that the cost of production has surged to its highest level in years due to the depreciation of the rupee against the dollar and record-high interest rates, leading to a slowdown in economic growth. Nisar called for a considerable reduction in the key policy rate to provide the private sector with access to low-cost borrowing.