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KARACHI: Pakistan’s business community has expressed disappointment after the State Bank of Pakistan (SBP) decided to keep the policy interest rate unchanged at 11.5 percent. Industry representatives believe lower borrowing costs are needed to encourage investment, industrial growth, and export expansion.
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said maintaining the policy rate in double digits continues to put pressure on businesses already facing high operating costs.
FPCCI President Atif Ikram Sheikh stated that expensive financing remains one of the biggest challenges for manufacturers and exporters. According to him, keeping interest rates high could slow industrial activity and make it harder for businesses to compete in international markets.
He emphasized that Pakistan needs a more growth-oriented monetary policy, arguing that reduced borrowing costs would help attract investment, create jobs, and support economic recovery.
Business Sector Calls for Rate Cut
Senior FPCCI officials noted that several regional economies are operating with significantly lower interest rates, giving their industries a competitive advantage. They warned that high financing costs could discourage business expansion and limit opportunities for small and medium-sized enterprises (SMEs).
Business leaders urged the central bank to consider a reduction in the policy rate during the next Monetary Policy Committee (MPC) meeting. They believe a move toward a single-digit interest rate would provide much-needed relief to the private sector.
Karachi Business Community Also Concerned
Representatives from Karachi’s business community echoed similar concerns, saying many investors had expected a rate cut due to improving economic indicators and easing inflation pressures.
Industry stakeholders argue that lower interest rates would support manufacturing, boost exports, and encourage new investment across key sectors of the economy.
OICCI and PBC Support SBP Decision
While business groups pushed for monetary easing, some organizations welcomed the SBP’s decision.
The Overseas Investors Chamber of Commerce and Industry (OICCI) described the policy as a balanced approach, saying it allows policymakers to assess economic conditions before making further adjustments.
Similarly, the Pakistan Business Council (PBC) called the decision prudent, noting that inflation risks and economic uncertainties still require careful monitoring.
Outlook for the Next MPC Meeting
The debate over Pakistan’s interest rate policy is expected to continue in the coming weeks. Business organizations remain hopeful that if inflation continues to ease, the central bank may consider a rate cut in a future MPC meeting to support economic activity and private-sector growth.
As discussions continue, the focus remains on whether upcoming economic data will create room for a more accommodative monetary policy in Pakistan.
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