Karachi: Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has strongly condemned the State Bank of Pakistan’s recent decision to keep the policy interest rate at 11%, calling it “incomprehensible” given the current economic landscape. Sheikh expressed deep concern about the detrimental effects this stubborn stance will have on the business environment and the broader economy.
Sheikh urged the central bank to reduce the policy rate to 6-7%, aligning it with prevailing inflation rates and economic realities to stimulate growth. He pointed out that such a reduction could have lowered the government’s debt burden by around PKR 3,500 billion, offering critical fiscal relief.
Highlighting government data showing inflation dropped to 3% in August 2025, Sheikh criticized Pakistan’s interest rate as “significantly higher” than regional peers. He warned that this elevated cost of borrowing suppresses economic activity and deters investment. “For businesses to thrive and compete, the policy rate must be brought down to a single-digit figure,” he insisted.
Saquib Fayyaz Magoon, Senior Vice President FPCCI, emphasized that high interest rates increase production costs, further fueling inflation. “A single-digit rate would reduce costs, make goods more affordable, and ultimately ease inflationary pressures,” he explained. Magoon also noted that high rates restrict currency circulation, stalling economic growth.
The FPCCI also highlighted prior assurances from Federal Finance Minister Muhammad Aurangzeb about an impending rate cut, calling the decision to maintain the high rate a serious setback to business expectations.
Mr. Abdul Mohamin Khan, Vice President & Regional Chairman Sindh, FPCCI warned that sustaining the high interest rate will severely damage the business climate, dissuade investment, and slow economic recovery. He urged the State Bank to rethink its policy and adopt measures that support businesses by lowering borrowing costs and spurring growth.
He concluded, “The business community is the backbone of Pakistan’s economy. A conducive monetary policy with a single-digit interest rate is vital to boost industrial output, create jobs, and stabilize prices. We call on the State Bank to take immediate action to align its policies with the needs of the economy.”
