Karachi: President of the Korangi Association of Trade and Industry (KATI), JunaidNaqi, has expressed deep disappointment over the State Bank of Pakistan’s (SBP) decision to maintain the policy interest rate at 11%, stating that the move overlooks the demands and pressing concerns of the business community.
Naqi remarked that the country’s economic indicators clearly justify a significant cut in the policy rate, ideally bringing it down to 6%, a level that industry stakeholders have repeatedly advocated for. “Retaining such a high interest rate under the current economic climate is not only unjustified but will also continue to burden the already struggling industrial sector,” he said.
According to the KATI President, inflation has notably declined and has now entered single digits, while improvements in foreign exchange reserves and a narrowing current account deficit indicate a stable macroeconomic environment all of which support the case for a more business-friendly monetary policy.
“Unfortunately, the Monetary Policy Committee has chosen to ignore these indicators and has kept the rate at one of the highest levels in the region, creating further uncertainty for business.” Naqi added.
He warned that the high interest rate is adversely affecting small and medium enterprises (SMEs), limiting exports, discouraging new investments, and threatening job creation at a time when economic stability and growth are urgently needed.
Naqi emphasized that the private sector, especially manufacturing and export-driven industries, are under severe financial stress with no relief in sight. He appealed to the government and the State Bank to align the interest rate with the ground realities of the economy, enabling the revival of business activities and long-term economic sustainability.
“The monetary policy must now support growth instead of suppressing it,” Naqi concluded.
