Karachi, July 25, 2025 – The Karachi Chamber of Commerce and Industry (KCCI) has strongly urged the State Bank of Pakistan (SBP) to implement a drastic cut in the benchmark interest rate, bringing it down from the current 11% to around 6%.
The appeal aims to align Pakistan’s monetary policy with regional economies and alleviate the rising cost of doing business.
In a detailed statement issued on Friday, KCCI President Jawed Bilwani emphasized that the prevailing high interest rate in Pakistan is out of step with regional peers and has become a major obstacle for business and industrial growth. “Countries like Vietnam, Cambodia, Indonesia, and India maintain interest rates between 3% and 6.3%, while Pakistani businesses are burdened with exorbitantly high financing costs,” he noted. He further highlighted electricity tariffs in Pakistan at 16 cents per unit—far above those in Bangladesh, Vietnam, and Sri Lanka—making the local industry uncompetitive.
Bilwani urged the SBP to immediately bring down the policy rate to 5–6%, particularly to support small and medium-sized enterprises (SMEs), which are hit hardest by the high cost of credit. He also called for structural reforms, noting that government borrowing consumes over 75% of available banking credit, leaving minimal space for the private sector. “The SBP must adopt a more growth-oriented approach to facilitate business expansion and job creation,” he stressed.
Criticizing the SBP’s recent decision to halt its rate-cutting cycle, Bilwani said it contradicts earlier government promises to bring interest rates down to single digits by the end of 2024. “We’re now well into 2025, and the SBP has yet to deliver,” he remarked.
Bilwani added that interest rate cuts alone won’t suffice. He called on the SBP and the government to rationalize electricity and gas tariffs, port charges, taxes, and labor costs. “If Pakistan wants to increase exports and attract investment, at least one major input cost must be regionally competitive,” he said.
The KCCI president concluded by urging the SBP to closely collaborate with the business community in shaping policies that promote industrialization, economic revival, and export-led growth.