FPCCI President Atif Ikram Sheikh Slams SBP for Keeping Policy Rate Unchanged at 11%

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has strongly criticized the State Bank of Pakistan’s decision to maintain the policy rate at 11 percent, calling it a major setback for businesses and economic recovery. In a statement, FPCCI said the central bank’s stance was out of sync with ground realities, especially as inflation had already eased to 5.6 percent in September. The federation urged the State Bank to take a more growth-oriented approach and cut the policy rate to 7 percent to stimulate investment and industrial activity. FPCCI President Atif Ikram Sheikh said the current policy rate was anti-growth and damaging business confidence. He noted that a 4 percent rate cut could have reduced the government’s debt burden by nearly Rs. 3,500 billion, freeing up fiscal space for development spending. “Pakistan’s interest rate remains far above regional levels,” Sheikh said. “This discourages borrowing, limits business expansion, and prevents our industries from competing globally.” FPCCI Senior Vice President Saquib Fayyaz Magoon added that keeping interest rates high directly raised production costs, fueling inflation instead of controlling it. He said a single-digit interest rate would lower manufacturing expenses and make goods more affordable for consumers. Magoon reminded that Finance Minister Muhammad Aurangzeb had earlier hinted at a rate cut, making this decision a disappointment for the business community. FPCCI Vice President Abdul Mohamin Khan warned that the unchanged rate would further weaken investor confidence and slow Pakistan’s economic recovery. He said a lower policy rate was vital to boost industrial output, create jobs, and stabilize prices. “The business community is the backbone of Pakistan’s economy,” Khan said. “We urge the State Bank to realign its policy with the needs of growth and investment.”