Governor State Bank Announces 1% Interest Rate Cut

Governor of the State Bank, Jameel Ahmed, has announced a further reduction of 1% in the interest rate, bringing it down from 13% to 12%. With this change, many ordinary Pakistanis are wondering how this will benefit them.

**Impact on the Stock Market**
Stock market expert Shahriyar Butt explains that when interest rates decrease, the money tends to move from the banking sector to the stock market. This trend has been observed in the past year, where companies benefitted from lower interest rates, leading to higher profits and benefits for shareholders.

**Industries Set to Stand on Their Own**
Economic analyst Mohammad Adnan Parcha believes that the drop in interest rates from 22% to 12% signifies that industries are now on their way to becoming self-sustaining. He adds that government debt is decreasing, and tax collection is improving, both of which are essential for keeping industries running. As industries get a boost, job opportunities will increase, and consumer purchasing power will rise. Money moving out of banks and into the market will have a positive effect on various sectors.

**Improvement in Car Financing**
Auto industry expert Mashood Ali Khan notes that the reduction in interest rates has already led to improvements in car financing and further improvement is expected. While the prices of vehicles might not be directly impacted, the relationship with banks certainly is. He suggests that if the State Bank amends its policy to allow banks to offer loans for vehicles worth more than 30 lakh rupees, further improvements could occur.

**Resurgence of Bank Financing Departments**
Khan further explains that banks’ financing departments, which had previously shut down, are now reopening. Where previously, buyers had to pay 24 rupees for financing, they now only pay 12 rupees, making car loans more accessible.

**Property Market to Improve**
According to property business expert Moaz Liaquat, the reduction in interest rates is expected to boost the property market. He mentions that the money leaving banks will have a ripple effect on all sectors, including real estate. As the economy improves, people’s desires to purchase property will also rise.

In summary, the reduction in interest rates is expected to benefit various sectors including the stock market, auto financing, and the real estate market, and provide a much-needed boost to industries, ultimately leading to more job opportunities and economic growth.