Business community terms rate hold ‘a difficult decision’

KARACHI: The business community has termed the State Bank of Pakistan’s decision to maintain the policy rate at 11.5 percent as a difficult one, while urging that the benchmark policy rate be brought down to single-digit levels in the next monetary policy meeting to help reduce production costs in the industrial sector.

They urged the SBP to consider a 2-3 percent reduction in the next monetary policy to support economic growth and industrial activities.

Saquib Fayyaz Magoon Senior Vice President Federation of Pakistan Chamber of Commerce and Industry (FPCCI) and Chairman Businessman Panel Progressive (BMPP) has said that in current economic scenario it was difficult for the Monetary Policy Committee to reduce the policy rate, therefore, we cannot criticize the to the committee or State Bank.“State Bank has taken a difficult decision and the business community will accept it with great difficulty,” he added.

However, the business community is facing significant challenges, as financing costs in Pakistan remain much higher than in other regional economies. In particular, the country’s industry is also burdened with elevated energy costs. “We believed that our industry and businesses cannot run on such high financial costs, therefore, we are demanding a single digit policy rate to support our export and industrial sector,” he added.

With the higher cost of production, Pakistani industry and exporters are facing a lot of competition in the international market and unable to compete with other competitors, resulted in decline in overall exports, he maintained.

“On behalf of business community, we request the State Bank to reduce the interest rate by 2-3 percent in the next monetary policy to support the industry,” Magoon said.

Muzammil Rauf Chappal Chairman Cereal Association of Pakistan (CAP) said that there was some space for the rate cut after the successful peace agreement between US-Iran, however, SBP has kept the policy rate unchanged.

He said currently, there is need to support the industrial sector by reducing policy rate as current interest rate is at an unsustainable level for the industrial sector. He added that high financial costs are affecting business activity and leading to a decline in investment.

He said Pakistani exporters cannot compete in global markets unless the policy rate is reduced to single digits. Therefore, the monetary policy committee must consider easing the monetary policy by lowering the interest rate by 2-3 percent.

Copyright Business Recorder, 2026