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Karachi: President of the Korangi Association of Trade and Industry (KATI) Junaid Naqi expressed disappointment over the State Bank of Pakistan’s decision to set the policy rate at …. % in its latest monetary policy announcement. He stated that the policy does not meet expectations, especially given the current economic conditions.
According to a statement by Korangi Association of Trade and Industry, with inflation at its lowest level in years and the rupee showing stability, the policy rate should have been brought down to single digits to support economic growth. Naqi highlighted that the high-interest rates have made it increasingly difficult for industries to operate efficiently, with the elevated cost of production placing immense pressure on both local industries and exporters.
He noted that with the policy rate at …..%, access to working capital remains expensive and challenging for businesses, severely hindering their operations. The rising cost of borrowing has frozen new investments, bringing industrial growth to a standstill.
Small and medium enterprises (SMEs), which are considered the backbone of the economy, have been disproportionately affected by the current policy. According to Naqi, these businesses are facing declining productivity, rising unemployment, and reduced private sector engagement.
He stressed that the industry had expected a significant reduction in interest rates in the new monetary policy, but the current rates are likely to further stifle industrial output and discourage new investments. Naqi warned that the existing policy rate has intensified pressure on the business community and destabilized the economy.
Junaid Naqi urged the government and the State Bank to seriously consider the concerns of the industrial sector and develop policies that can stimulate economic recovery. He emphasized the need for a business-friendly monetary policy, stating that without immediate action to lower policy rates, the country’s economy and industrial sector could face long-term setbacks.
He called for urgent measures to ensure sustainable industrial growth and to alleviate the financial strain on businesses, enabling them to contribute to the country’s economic stability and development.
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