Karachi: The Pakistan Chemicals & Dyes Merchants Association (PCDMA) has expressed strong disappointment over the State Bank of Pakistan’s decision to increase the policy rate by one percent, cautioning that the move could further slow economic activity and hurt businesses.
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In a statement, PCDMA Chairman Salim Valimuhammad said the timing of the rate hike was particularly damaging, as Pakistan’s economy is already under pressure from global uncertainty, rising fuel prices, and inflation.
He argued that increasing interest rates in an attempt to control inflation is not an effective solution and has historically placed an additional burden on traders and industrialists. “When interest rates rise, economic activity slows down. This is a well-established reality, yet the opportunity to reduce rates when conditions were favorable was missed,” he said.
Valimuhammad warned that the latest decision would further strain businesses already struggling with high operational costs and declining market activity. He added that the policy could dampen investment and reduce overall economic momentum.
Calling for a shift in approach, he urged policymakers to adopt a pro-growth monetary policy by lowering interest rates to stimulate trade and industrial activity. He emphasized that easing borrowing costs would help generate employment, support business expansion, and contribute to broader economic stability.
The PCDMA chief also stressed the need for the government and central bank to seriously consider the concerns of the business community in shaping future economic policies.
