AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
Islamabad: The State Bank of Pakistan’s (SBP) decision to hold the policy rate at 11% has drawn sharp criticism from the SITE Association of Industry (SAI), which argues that the move could undermine the government’s economic revival strategy.
SAI President Ahmad Azeem Alvi voiced serious apprehension about the central bank’s stance, echoing the business sector’s persistent call for single-digit interest rates.
“Despite the steady decrease in inflation lately, the SBP has chosen to maintain its tight monetary policy. This choice is regrettable and unproductive, particularly when the administration is working to revitalize financial dynamism,” Alvi stated.
He highlighted the detrimental impact of elevated borrowing costs on small and medium-sized enterprises (SMEs), which are already facing escalating operational expenses. “Costly loans are pushing SMEs towards collapse. If the SBP is unable to drastically cut the rate immediately, it should at least contemplate incremental reductions to bolster the manufacturing sector,” he added.
Alvi noted that competing nations offer more favorable financial conditions with simpler and cheaper access to credit, urging the SBP to acknowledge these trends and adjust its policies to nurture domestic industrial expansion.
The SAI leader called on the Monetary Policy Committee to re-evaluate its position in light of practical circumstances, emphasizing that lowering the policy rate is crucial for stimulating corporate development, attracting investments, and steering Pakistan towards sustainable economic progress.