Pakistan’s largest business body has criticized the State Bank of Pakistan (SBP) for leaving the policy rate unchanged at 11.5 percent, arguing that the decision will keep borrowing costs high and slow industrial and export growth.

In a statement issued after the Monetary Policy Committee (MPC) meeting, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) said businesses had expected a rate cut to ease financing costs and support economic recovery.

Acting FPCCI President Saquib Fayyaz Magoon described the decision as contractionary, saying high interest rates continue to restrict access to finance, discourage investment, and increase the cost of doing business.

He said manufacturers and exporters are already struggling with elevated energy tariffs and expensive bank financing, making it increasingly difficult to compete in international markets. According to Magoon, Pakistan needs a single-digit policy rate to reduce production costs, improve affordability, and stimulate economic activity.

FPCCI Vice President and Regional Chairman Sindh Abdul Mohamin Khan said the decision was difficult to justify as core inflation has shown signs of moderation. He argued that the high cost of capital continues to force industrial closures and weaken the competitiveness of Pakistani exporters.

The business body warned that maintaining the current policy rate could further dampen investment, delay economic recovery, and undermine industrial expansion during the current fiscal year.

FPCCI urged the central bank to present a clear roadmap for reducing the policy rate to single digits, warning that without lower financing costs, Pakistan may struggle to achieve its export and industrial growth targets.