Industry is frustrated by the status quo of policy interest rate

Karachi:

The commercial and industrial community has strongly reacted to the decision of the Pakistani State Bank (SBP) to leave its unchanged policy unchanged to 11%, which contradicts the widespread expectations to reduce 50 bases and requires a huge cut to about 6%.

In the evolution of monetary policy on Wednesday, commercial operators had released statements, calling on the central bank to reduce the drastic reduction of costs, which would cause industries and overall economy and boost exports and employment.

In a statement, Pakistan’s Pakistani Trade and Industry (FPCCI) president, Atif Ikram Sheikh, observed that the business, industrial and commercial community was frustrated by monetary policy as it continued to rely on a heavy premium against the Consumer Price Index (CPI).

He stressed that the ICC was 3.2% in June 2025, but the policy rate was linked to 11%, reflecting a 780 -base premium compared to inflation and has no financial logic. He points out that, after discussions with different sectors and sectors, the FPCCI had requested a reduction of 500 basis points during a Wednesday’s Monetary Policy meeting.

While expressing the frustration over the Central Bank’s decision to maintain the unchanged policy unchanged at 11%, the Pakistani Manufacturers and Export Association (PHMA) underlined the adverse business climate, including high interest rates, rogue taxation and high costs.

PHMA President Central Muhammad Babar Khan claimed that the status quo of the policy interest rate would harm the growth of exporters and manufacturers in various sectors. “Pakistan’s policy rate is higher than the region, which makes it extremely difficult for exporters to compete with countries such as Vietnam, Bangladesh and India,” he said.

Meanwhile, the president of the Karachi Chamber of Commerce and industry president Muhammad Jawed Bilwani, in a statement, said that at a time when Pakistan’s basic inflation had fallen significantly, there was no healthy financial excuse to maintain cost borrowing.

“The state bank has reported inflation increase during May and June, along with concerns about a moderate increase in the coming months due to persistent pressure on energy prices, as reasons for maintaining the policy rate.

Bilwani saw sufficient room to reduce the interest rate to one -digit, as many regional economies had made a similar or even more complex economic environment. “With the loss of this critical opportunity to reduce the interest rate, the state bank has weakened the hopes of financial revival,” he said.