KARACHI: President Karachi Chamber of Commerce & Industry (KCCI) Muhammad Rehan Hanif has expressed deep disappointment over the State Bank of Pakistan’s decision to keep the benchmark interest rate unchanged at 11 percent, calling it a missed opportunity to provide much-needed relief to the business and industrial community.
“Given that inflation has remained largely under control, the business community was expecting a reduction of at least 200 basis points, bringing the rate down to around 9 percent,” he stated. “Unfortunately, this expectation has not been met, a decision that is beyond comprehension considering the current economic realities.”
Rehan Hanif emphasized that the government should have aligned its monetary policy with regional competitors where interest rates are significantly lower. “Even if a reduction to 9 percent was deemed unfeasible, a cut to at least 10 percent should have been announced,” he said.
Highlighting the imbalance in credit distribution, KCCI President noted that government borrowings remain at their highest levels while credit flow to the private sector continues to be limited. “Although the situation has improved compared to the record-high 23 percent policy rate, the existing 11 percent rate is still too burdensome for businesses striving to survive amid unprecedented cost pressures,” he added.
Rehan Hanif recalled that at the end of 2024, the government had publicly pledged to bring the interest rate down to single digits, a commitment that remains unfulfilled. “This unkept promise has disheartened the business community which had pinned hopes on a more growth-oriented monetary stance,” he remarked.
He warned that the private sector, already struggling with the skyrocketing cost of doing business driven by exorbitant gas and electricity tariffs, cannot afford to bear the additional strain of costly borrowing. “If the government truly wants to revive industrial activity, create jobs, and enhance exports, it must take urgent steps to bring down both the interest rate and utility costs,” he urged.
“The business community has shown resilience despite challenging conditions,” Rehan Hanif concluded, “but without a substantial reduction in the cost of doing business, Pakistan’s economic recovery will remain elusive.”
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