Business circles disappointed over SBP rate pause

• Call for a cut in next MPC meeting to support industrial recovery• OICCI, PBC term SBP decision ‘balanced, prudent’

KARACHI: The business community on Monday expressed disappointment over the State Bank’s decision to keep the policy rate unchanged at 11.5pc, urging monetary easing to support growth, exports and investment amid easing inflation expectations.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh said that a static policy rate in double digits is highly detrimental to the country’s economic survival, adding that failure to ease borrowing costs would accelerate de-industrialisation and severely undermine export targets, which are critical for earning foreign exchange.

Expressing concern over what he termed a disconnect between the central bank and the challenges faced by trade and industry, he said the decision to hold the policy rate was unfortunate despite expectations of a downward trend in inflation following the announcement of a US-Iran peace deal facilitated by Pakistan and gradual normalisation of global energy supplies.

Amid a cost-of-doing-business crisis across the manufacturing sector, he said the SBP’s overly cautious and contractionary stance was starving the private sector of essential capital. “The economy cannot transition to a growth model without a rationalised, single-digit interest rate aligned with domestic realities and the vision of the Special Investment Facilitation Council,” he added.

FPCCI Senior Vice President Saquib Fayyaz Magoon said regional competitors were operating with significantly lower borrowing costs, rendering Pakistani exports uncompetitive in global markets. Maintaining the........

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