The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has criticized the State Bank of Pakistan’s (SBP) decision to keep the policy rate at 11.5 percent, saying high borrowing costs are holding back businesses and industrial activity.
FPCCI President Atif Ikram Sheikh said the decision was contractionary and would make it harder for industries to recover. He said the business community had called for the policy rate to be brought into single digits to reduce financing costs.
Sheikh said monetary policy could provide immediate relief to businesses, but the latest decision failed to address the financing pressures facing the private sector.
He pointed to the 18.1 percent increase in the trade deficit during July-August 2026 compared with the same period last year, saying the data reflected growing pressure on the economy.
According to Sheikh, industries are facing multiple challenges, including high energy and petroleum costs, geopolitical uncertainty and expensive financing.
He said manufacturers were struggling to secure working capital, while limited access to credit was affecting both small and medium-sized businesses and large-scale manufacturers.
The FPCCI president also warned that high interest rates were hurting exports by increasing production and financing costs. Pakistani exporters were facing stronger competition from regional markets where businesses have access to lower-cost financing, he added.
Sheikh said expensive export refinancing was making Pakistani products less competitive and could lead to lost orders and lower foreign exchange earnings.
He urged the SBP to reconsider its decision and take measures to reduce financing costs and support industrial activity.
