Karachi, October 27, 2025 – The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has strongly condemned the State Bank of Pakistan’s (SBP) decision to maintain the policy rate at 11 percent, calling it an “anti-growth and counterproductive” move that threatens business confidence and economic revival.
Reacting to the central bank’s latest monetary policy decision, FPCCI President Atif Ikram Sheikh expressed deep disappointment, stating that the SBP’s high interest rate stance undermines industrial activity, investment, and job creation. He argued that in the current macroeconomic environment, the policy rate should be reduced to around 7 percent to stimulate growth and ease financial pressures on businesses.
Sheikh emphasized that such a reduction could have lowered the government’s debt servicing burden by approximately PKR 3,500 billion, freeing up vital fiscal space for development spending. “Pakistan’s interest rate remains disproportionately high compared to regional economies,” he noted, adding that such restrictive policies stifle private sector expansion and discourage both local and foreign investment.
Citing official data, Sheikh highlighted that headline inflation declined to 5.6 percent in September 2025, yet the central bank continues to pursue a tight monetary policy. “With inflation easing, the continuation of an elevated policy rate lacks justification,” he remarked, urging the SBP to adopt a pro-growth monetary framework that encourages business competitiveness.
FPCCI Senior Vice President Saquib Fayyaz Magoon echoed these concerns, stating that persistently high interest rates have a cascading impact on production costs, ultimately fueling inflation instead of curbing it. “A single-digit policy rate would lower borrowing costs, make goods more affordable, and support sustainable price stability,” he explained.
He also referred to earlier statements by Finance Minister Muhammad Aurangzeb, who had hinted at an expected policy rate reduction. The SBP’s decision to maintain the status quo, Magoon added, has disappointed the business community that had been anticipating monetary easing.
FPCCI Vice President and Regional Chairman Sindh, Abdul Mohamin Khan, warned that maintaining the current rate would deter investment, suppress industrial output, and slow economic recovery. He urged the central bank to revisit its policy stance and adopt measures that enhance liquidity, reduce borrowing costs, and support Pakistan’s growth trajectory.
“The business community is the backbone of Pakistan’s economy,” Khan stressed. “A conducive monetary policy with a single-digit rate is essential to boost productivity, create jobs, and achieve sustainable economic stability.”