Karachi, December 10, 2025 – The Karachi Chamber of Commerce and Industry (KCCI) has called on the State Bank of Pakistan (SBP) to lower the benchmark policy rate by 1 percentage point, citing a noticeable decline in inflation and improved macroeconomic conditions.
In a joint statement, Zubair Motiwala, Chairman of the Businessmen Group (BMG), and Muhammad Rehan Hanif, President of KCCI, emphasized that the time is right for monetary easing. They urged the central bank to reduce the policy rate to 10 percent, arguing that inflation has moderated significantly from the elevated levels seen in 2024, creating room for a meaningful rate cut.
The business leaders noted that the policy rate has remained unchanged at 11 percent for the fourth consecutive time, including the decision announced on October 27, 2025. They warned that keeping rates high for an extended period is placing unnecessary pressure on the economy, particularly on industries, SMEs, exporters, and investors who continue to face steep borrowing costs.
According to KCCI, Pakistan’s external sector has shown encouraging signs of recovery. Program inflows, improvements in foreign exchange reserves, and reduced macroeconomic stress have collectively strengthened the case for monetary relaxation. They said a 100-basis-point reduction would help revive investment sentiment, ease working-capital constraints, and allow businesses to plan expansions and hiring that were previously delayed due to high financing costs.
They further argued that Pakistan’s interest rate of 11 percent is among the highest in the region. In comparison, the Reserve Bank of India’s policy rate stands near 5.25 percent, Sri Lanka’s at 7.75 percent, Vietnam’s at 4.5 percent, Nepal’s at 4.5 percent, and Bangladesh’s repo rate at around 10 percent. This disparity, they noted, has undermined the competitiveness of Pakistan’s producers and exporters.
KCCI expressed hope that the upcoming Monetary Policy Committee (MPC) meeting on December 15 would deliver a supportive signal by announcing a 1 percent cut, helping restore business confidence and accelerate economic recovery.