KARACHI: Saquib Fayyaz Magoon, Chairman of the Businessmen Panel Progressive (BMPP) and Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), has expressed deep disappointment over the Monetary Policy Committee’s decision not to reduce the policy rate. He termed this decision completely contrary to the expectations of the FPCCI and the broader business community.
In a statement, Saquib Fayyaz Magoon said that the move runs contrary to the expectations of the country’s trade and industry. “Inflation has gradually come down to 5.6 percent, leaving ample room for a reduction in the policy rate. The State Bank could have easily brought interest rates into single digits, but failing to do so is discouraging for the business community,” he said.
Magoon explained that, according to global principles, interest rates are determined by adding a positive real rate of 2 to 4 percent to the prevailing inflation. “If inflation is at 5.6 percent, then the policy rate should ideally be between 7.6 and 9.6 percent. This is a level the State Bank could have adopted without difficulty,” he noted.
He stressed that businesses had anticipated a cut to at least 7–8 percent, which would have provided much-needed relief and boosted economic activity. “The cost of financing is already unbearable, overall business expenses have surged, and energy tariffs remain exceptionally high. Elevated interest rates are further squeezing industrial and commercial operations,” he added.
Calling for urgent action, Saquib Fayyaz Magoon urged the government and the central bank to reconsider their stance in light of ground realities. “A single-digit interest rate is not only possible but essential for economic revival and restoring business confidence,” he emphasized.
