KARACHI: The Pakistan Hosiery Manufacturers & Exporters Association (PHMA) has urged the State Bank of Pakistan (SBP) to refrain from raising the policy rate at the upcoming Monetary Policy Committee (MPC) meeting scheduled for June 15, 2026.
PHMA Patron-in-Chief Muhammad Jawed Bilwani said export-oriented industries—particularly the value-added textile sector—are already under severe pressure due to high energy costs, increased taxation, regulatory compliance burdens, and strong competition from regional economies. Any further increase in the policy rate, he warned, would raise the cost of doing business and erode the competitiveness of Pakistani exports in global markets.
He noted that the recent hike in the policy rate to 11.5 percent has already added significant financial costs for exporters and industrial units. At a time when the government aims to boost exports, generate employment, and promote industrial growth, higher borrowing costs would be counterproductive and harmful to economic activity. Recent market surveys, he added, show expectations split between maintaining the current rate and a further increase ahead of the June 15 MPC meeting.
“The export sector needs a stable and supportive monetary environment to sustain production, meet export orders, and invest in expansion,” Bilwani said. “High interest rates discourage investment, constrain working capital, and weaken exporters’ ability to compete with regional rivals that enjoy much lower financing costs.”
Bilwani emphasised that Pakistan’s value-added textile industry is largely composed of small and medium enterprises (SMEs), which are particularly vulnerable to rising financing costs. These firms play a vital role in export earnings, employment creation, and value addition, and therefore require policy support rather than additional financial strain.
He added that industrial growth remains fragile and exporters continue to face liquidity pressures under the current tax and regulatory framework. Maintaining the existing policy rate or preferably reducing it would provide needed relief and support the government’s export-led growth objectives.
Calling for a balanced approach, Bilwani urged the MPC to consider the concerns of productive sectors and adopt a monetary policy that encourages investment, industrial expansion, and export growth. “Sustainable economic growth is not possible without a competitive industrial base. Monetary policy should support economic activity, not restrict it,” he said.
He expressed hope that the SBP would avoid further tightening and announce a policy that aids industrial recovery, strengthens export competitiveness, and supports long-term economic stability and growth.
Copyright Business Recorder, 2026
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