KARACHI: President of the Korangi Association of Trade and Industry (KATI), Muhammad Ikram Rajput,
has expressed deep disappointment over the State Bank of Pakistan’s decision to maintain the policy
interest rate at 11 percent following its recent Monetary Policy Committee (MPC) meeting. This marks
the fourth consecutive MPC session in which the policy rate has been kept unchanged for the next two
months.
Ikram Rajput said the decision is disheartening for industrial and commercial sectors and runs contrary
to the ongoing economic recovery efforts. He noted that inflation has dropped to a manageable level of
5.6 percent, yet the State Bank has chosen to maintain a high interest rate, which he termed an anti-
industry move.
He pointed out that industries are already under severe pressure due to rising production costs,
expensive energy, and weak demand. The recent increases in gas and electricity tariffs, he said, have
already strained industrial operations, and the State Bank’s decision will further worsen the situation.
Rajput added that industrialists had expected a reduction of at least 1 to 1.5 percent in the interest rate
to stimulate investment, reduce production costs, and generate employment opportunities. However,
maintaining the current rate, he warned, poses a serious concern for the national economy.
Highlighting the situation in Karachi’s industrial zones, particularly Korangi Industrial Area, he said that
high borrowing costs have made it nearly impossible for small and medium-sized enterprises (SMEs) to
access bank financing. This, in turn, is negatively impacting production, exports, and job creation.
Rajput urged the government and the State Bank to take immediate measures to support the industrial
and export sectors, including reducing the policy rate, lowering energy costs, implementing tax reforms,
and encouraging new investment to put Pakistan’s economy on a path of sustainable growth.
He concluded by saying that industry is the backbone of the national economy, and if policymakers
continue to ignore the challenges faced by the business community, economic recovery will become
even more difficult. He called on the State Bank to consider ground realities and reduce the interest rate
to give industries the breathing space they urgently need.
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