FPCCI Criticizes SBP Policy Rate Decision, Calls for Single-Digit Interest Rates
Business leaders warn that keeping the policy rate unchanged will raise financing costs, discourage investment, and slow Pakistan’s industrial and export recovery.
FPCCI leaders call for lower interest rates following the State Bank's monetary policy announcement.
KARACHI, July 27, 2026: Pakistan’s leading business body has criticized the State Bank of Pakistan’s decision to keep the Policy Rate unchanged, saying the move will prolong financial pressure on industries and delay economic recovery.
Saquib Fayyaz Magoon, Acting President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), expressed disappointment after the State Bank’s Monetary Policy Committee (MPC) decided to maintain the benchmark interest rate. He described the decision as contractionary and said businesses had expected a rate cut to reduce borrowing costs and support economic activity.
Magoon argued that the unchanged policy rate would continue to increase the cost of doing business. Moreover, he said expensive financing limits access to credit, weakens industrial growth, and makes it harder for companies to expand operations.
He added that manufacturers and exporters already face mounting challenges because of high energy tariffs and elevated financing costs. Therefore, he urged the central bank to adopt a single-digit interest rate to lower production costs, improve competitiveness, and stimulate investment.
Abdul Mohamin Khan, Vice President and Regional Chairman Sindh of FPCCI, also criticized the decision. He said core inflation has stabilized, making the current interest rate unnecessarily high. Furthermore, he argued that the high cost of capital continues to force industrial closures and reduces the competitiveness of Pakistani exporters in global markets.
Khan warned that maintaining the existing monetary policy could discourage fresh investment and weaken commercial activity. In addition, he said the decision could slow economic recovery and create further uncertainty for businesses.
FPCCI reiterated that the private sector remains the backbone of Pakistan’s economy. The organization stressed that a business-friendly monetary policy with a reduced, single-digit interest rate would help increase industrial output, create employment, encourage investment, and stabilize prices.
The chamber also urged the State Bank of Pakistan to provide a clear roadmap for easing monetary policy. It warned that without lower interest rates, Pakistan may struggle to achieve its export and industrial growth targets during the current fiscal year.
