Karachi: Mr. Saquib Fayyaz Magoon, Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed his profound disappointment that the State Bank of Pakistan’s (SBP) decision to maintain the status quo on its key policy rate following today’s Monetary Policy Committee (MPC) meeting.
The apex trade body termed the decision as “contractionary,” warning that holding the benchmark interest rate at an elevated level will continue to stifle economic activity, hamper access to finance, and severely undermine industrial revival efforts across the country.
Mr. Saquib Fayyaz Magoon categorically denounced the central bank’s cautious approach; emphasizing that the business community had anticipated some reduction to help bring down the exorbitant cost of doing business – and, facilitate trade & industry to cope with the economic challenges.
Acting FPCCI Chief maintained that, in the current economic scenario, maintaining the status quo on the policy rate is a setback to the business community’s expectations as Pakistani industry and exporters are already battling an existential crisis due to elevated energy tariffs and sky-high financing costs.
Mr. Saquib Fayyaz Magoon, Acting President FPCCI, stressed that we cannot run our industries or compete in global markets under such punishing financial burdens. A single-digit interest rate is absolutely critical right now to lower production costs, make goods and services more affordable, and effectively kickstart the economy.
Mr. Abdul Mohamin Khan, VP & Regional Chairman Sindh, FPCCI, highlighted that with core inflation stabilizing, keeping the interest rate persistently high reflects an unjustified premium that makes no economic sense. The continued high cost of capital remains the primary driver of industrial closures and the inability of Pakistani exporters to remain globally competitive.
Mr. Abdul Mohamin Khan warned of the immediate negative impacts the MPC’s decision will have on commercial hubs and overall economic stability. Keeping the interest rate unchanged will undermine the business environment, discourage essential investment, and hinder any hopes of a swift economic recovery, he added.
The FPCCI maintains that the business community is the backbone of Pakistan’s economy and, conducive monetary policy with a reduced, single-digit interest rate is essential to boost industrial output, create jobs, and stabilize prices. The FPCCI urges the SBP to urgently reconsider its stance and adopt measures that genuinely support business continuity and growth.
The FPCCI leadership demands a clear and immediate roadmap from the SBP to aggressively correct the monetary stance. The apex body warned that without an immediate transition to single-digit interest rates aligned with ground realities, the national targets for export growth and industrial expansion for the current fiscal year will remain elusive.
