KARACHI: President of the Site Association of Industry Abdul Rehman Fudda has voiced disappointment over the State Bank of Pakistan decision to keep the policy rate unchanged at 10.5 percent, warning that the move could further strain industrial activity and exports.
SAI president said the business community had hoped for a reduction in the policy rate to ease financial pressure on manufacturers. However, maintaining a relatively high interest rate, he said, would make borrowing costly for businesses and discourage investment in the industrial sector.
He pointed out that industries were already facing rising production costs due to expensive electricity and gas, leaving little room for expansion. “Under these circumstances, keeping borrowing costs high makes it even more difficult for industries to expand operations or increase output,” he said.
Abdul Rehman Fudda noted that central bank officials had themselves acknowledged a decline in exports alongside an increase in imports, which he described as a sign of slowing economic activity. Given the situation, he said, a cut of at least one to one-and-a-half percentage points in the policy rate would have provided some relief to the business community and encouraged investment.
He added that bringing the policy rate down to single digits could have helped exporters obtain cheaper financing from banks, enabling them to expand production and compete more effectively in international markets. Such a move, he said, would also support economic growth by boosting industrial output and exports.
The SAI president urged the government and the central bank to take into account the challenges faced by the industrial and export sectors when making future monetary policy decisions, stressing that supportive policies were essential for economic stability and growth.
Ateeq Ur Rehman (economic & financial analyst) said, the Monetary Policy Committee has decided to keep the policy rate unchanged at 10.5 percent in its meeting held on 09th March 2026 owing to massive jump in petroleum prices and raise in inflation. The inflation is increasing day by day from 11pc to 13 pc, which is enormous, raising the cost of doing business, effecting industries / manufacturing / businesses, the competitiveness is declining exports and widening the trade deficit he said. Thus the cost of transportation / logistic support services has jumped gigantically consequently brining the consumer goods, groceries, fruit, vegetable, ghee / oil, dairy products, etc out of reach of a common man.
Copyright Business Recorder, 2026
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