KARACHI (special crosspondent) – Mr. Saquib Fayyaz Magoon, Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed profound disappointment regarding the State Bank of Pakistan’s (SBP) decision to maintain the status quo on its key policy rate following the most recent Monetary Policy Committee (MPC) meeting. The apex trade body described the decision as “contractionary,” warning that sustaining the benchmark interest rate at such an elevated level will continue to stifle economic activity, restrict access to finance, and severely undermine industrial revival efforts nationwide.

Mr. Saquib Fayyaz Magoon categorically denounced the central bank’s cautious approach, emphasizing that the business community had anticipated a reduction to help lower the exorbitant cost of doing business. He noted that such relief is essential for trade and industry to navigate ongoing economic challenges. While government officials have previously expressed commitments to empowering Pakistan’s SME sector, the Acting FPCCI Chief maintained that the current policy stance acts as a significant setback. He observed that Pakistani industries and exporters are already battling an existential crisis, compounded by elevated energy tariffs and sky-high financing costs.

Addressing Global Competitiveness

Mr. Saquib Fayyaz Magoon stressed that sustaining industrial operations or competing in global markets is unfeasible under current financial burdens. He argued that a single-digit interest rate is critical to reducing production costs, making goods more affordable, and effectively stimulating the economy. His remarks follow broader industry concerns about fiscal health, including issues surrounding cheap Chinese fabric imports that continue to threaten domestic manufacturers.

Economic Stability and Industrial Outlook

Mr. Abdul Mohamin Khan, Vice President and Regional Chairman for Sindh at FPCCI, highlighted that with core inflation stabilizing, maintaining a high interest rate represents an unjustified premium. He stated that the continued high cost of capital remains the primary driver of industrial closures and limits the capacity of Pakistani exporters to compete internationally. Mr. Khan warned of the immediate negative impacts the MPC’s decision will have on commercial hubs, noting that such policies discourage essential investment and hinder prospects for a swift recovery.

The FPCCI asserts that the business community remains the backbone of the national economy. The leadership is now demanding a clear, immediate roadmap from the SBP to adjust its monetary stance. The apex body warned that, absent a transition to single-digit interest rates, national targets for export growth and industrial expansion for the current fiscal year will remain elusive.