Interest Rate Maintenance at 11% Draws Criticism from Business Leaders

Karachi: President of the Korangi Association of Trade and Industry (KATI), Junaid Naqi, has voiced significant disappointment regarding the State Bank of Pakistan’s (SBP) decision to maintain the policy interest rate at 11%. Naqi argues that this decision neglects the demands and concerns of the business community, which has been advocating for a substantial reduction to 6%.

Naqi emphasized that the current economic indicators suggest a more favorable environment for a lower interest rate. He highlighted that inflation rates have decreased to single digits, foreign exchange reserves have improved, and the current account deficit has narrowed, indicating a stable macroeconomic environment. These factors, according to Naqi, should support a more business-friendly monetary policy.

The KATI President expressed concern that retaining the high interest rate continues to burden the industrial sector, particularly affecting small and medium enterprises (SMEs), limiting exports, discouraging new investments, and threatening job creation. He warned that these challenges come at a time when economic stability and growth are urgently needed.

Naqi appealed to both the government and the State Bank to consider aligning the interest rate with current economic realities. He stressed that the private sector, especially manufacturing and export-driven industries, is under significant financial pressure. Naqi concluded by urging for a monetary policy that supports growth to enable the revival of business activities and ensure long-term economic sustainability.