Finance Minister Aurangzeb hints at more interest rate cuts

Federal Finance Minister Mohammad Aurangzeb has indicated that there is room for further cuts in interest rates.

Speaking at the Karachi Chamber of Commerce, Aurangzeb stressed the importance of macroeconomic governance for economic growth, noting that structural issues in the economy often lead to balance of payment problems when growth increases.

Aurangzeb highlighted that all sectors, including retailers, builders, and realtors, must contribute to the economy.

He mentioned that agricultural tax is a provincial matter and expects provincial governments to implement it.

While emphasising the potential for further interest rate cuts, Aurangzeb noted that such decisions are the prerogative of the State Bank of Pakistan.

He expressed optimism that the State Bank would gradually lower the rates.

He also discussed his recent meetings with banks, urging them to avoid directed lending practices and not to secure loans against houses or cars.

Banks have been encouraged to lend to farmers and small businesses to boost economic activity.

Aurangzeb mentioned efforts to right-size ministries, referencing a report on ministry downsizing during Imran Khan's tenure that was never implemented.

He asserted the need for every sector to contribute to the tax net to avoid overburdening the salaried class.

He further revealed that the Sindh Chief Minister agreed to move towards legislation for taxing the agricultural sector, acknowledging that these measures are necessary for economic stability. Aurangzeb concluded by emphasising the need to address balance of payments issues and increase monthly exports to $4 billion.