PHMA concerned over SBP's decision to raise policy rate

LAHORE: The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has expressed serious concern over the State Bank of Pakistan’s decision to raise the policy rate by 50 basis points to 12 percent. The association warned that higher borrowing costs will further erode the competitiveness of the country’s export-oriented industries.

In a press statement issued on Wednesday, PHMA North Zone Senior Vice Chairman Izhar-ul-Haq said the increase came at a time when exporters were already struggling with high production costs, expensive financing and intense regional competition.

He said Pakistan’s policy rate was substantially higher than those of its competitors. Bangladesh stands at 9.5 percent, Sri Lanka at 8.75 percent and India at 5.5 percent. Such a gap, he argued, leaves Pakistani exporters at a disadvantage, particularly in the value-added textile and hosiery sectors, where buyers are highly price-sensitive.

“Pakistan’s export sector needs affordable and competitive financing to expand production, fulfil international orders and attract new investment,” he said, adding that the hike would raise the cost of working capital and weaken the competitiveness of Pakistani products abroad.

Izhar-ul-Haq urged the State Bank and the government to reconsider the impact of high interest rates and to introduce competitive financing facilities for exporters. He also called for lower energy and production costs, timely payment of tax and duty refunds, and a predictable policy environment for industrial investment.

He stressed that sustainable export growth was essential for generating employment, earning foreign exchange and strengthening the national economy.

Copyright Business Recorder, 2026