KATI Slams Unchanged Policy Rate Amidst Record-Low Inflation

Islamabad: Korangi Association of Trade and Industry (KATI) President Junaid Naqi expressed profound dissatisfaction with the State Bank of Pakistan’s decision to hold the monetary policy rate at 11 percent, particularly given the record-low inflation rate of 3 percent.

Naqi stated that the business sector has consistently advocated for a substantial interest rate reduction to single digits, which is essential for providing relief to industries. He highlighted that the prevailing elevated interest rate is detrimental to industrialists and exporters already grappling with severe capital limitations.

Pakistan’s interest rate, Naqi emphasized, remains the loftiest in the region, posing significant obstacles to investment and industrial expansion. He termed the central bank’s move “baffling and contrary to projections,” contending that a policy rate decrease would invigorate industrial operations and significantly alleviate the government’s debt load, thereby stabilizing the financial system and creating employment opportunities.

Naqi asserted that the current expensive credit is escalating production expenses and diminishing the competitiveness of Pakistani goods in global commerce. He cautioned that without affordable access to capital, exports will stagnate, hindering economic recuperation.

The KATI President implored the government and the central bank to consider the practical circumstances, address the business community’s legitimate apprehensions, and enact policies that foster industrial development and guarantee enduring economic stability.