Pakistan’s Business Leaders Express Disappointment Over Unchanged Policy Rate

Karachi: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) expressed dissatisfaction with the State Bank of Pakistan’s decision to maintain the current policy rate, a move seen as misaligned with the country’s economic needs.

Atif Ikram Sheikh, President of FPCCI, highlighted the disparity between the Consumer Price Index (CPI) and the policy rate. Despite a reported CPI of 3.20 percent in June 2025, the policy rate remains at 11 percent, creating a significant gap that Mr. Sheikh argues lacks economic justification.

In recent discussions, the FPCCI had advocated for a substantial reduction of 500 basis points in the policy rate to support the government’s broader economic goals, including industrial development and export growth. The FPCCI believes this adjustment would align with the objectives of the Special Investment Facilitation Council (SIFC) and the Prime Minister’s vision.

S. M. Tanveer, Patron-in-Chief of the United Business Group (UBG), suggested that the policy rate should have been reduced to 6 percent, considering CPI projections for the coming months. This sentiment was echoed by Abdul Mohamin Khan, VP FPCCI, who emphasized the importance of lowering interest rates to enhance the competitiveness of Pakistani exporters.

Aman Paracha, another VP of FPCCI, pointed out the challenges faced by businesses in terms of cost and access to finance, urging measures to improve these conditions. Asif Sakhi, VP FPCCI, noted the ongoing decline in inflationary pressures and stressed the need to support industry and exports to drive economic growth.

The FPCCI’s stance reflects a broader concern within Pakistan’s business community about the high cost of capital and its impact on the country’s economic prospects.