Business circles disappointed by SBP rate pause, urge cut for recovery

Pakistani business leaders voiced strong disappointment following the State Bank of Pakistan's (SBP) decision to hold the policy rate steady at 11.5%. They are calling for an immediate reduction in interest rates to bolster economic growth, boost exports, and encourage investment, especially as inflation shows signs of easing.

“

a static policy rate in double digits is highly detrimental to the country’s economic survival

Atif Ikram Sheikh, president of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), stated that a double-digit policy rate is severely damaging to the nation's economic health. He warned that failing to lower borrowing costs would worsen de-industrialization and hinder efforts to meet export targets, which are crucial for acquiring foreign exchange.

“

failure to ease borrowing costs would accelerate de-industrialisation and severely undermine export targets, which are critical for earning foreign exchange.

Sheikh expressed concern over a perceived disconnect between the central bank's monetary policy and the real-world challenges confronting Pakistani trade and industry. He described the decision to maintain the current rate as unfortunate, particularly given the easing inflation expectations. The business community is pushing for monetary easing to support a struggling industrial sector and improve the country's financial standing.

“

the decision to hold the policy rate was unfortunate despite