Keeping Policy Rate At 11.5% Concerning For Industrial Revival: KATI President.
✧ GENERATE BRIEFING +
Korangi Association of Trade and Industry (KATI) President Muhammad Ikram Rajput has joined industrial leaders in expressing deep concern over the State Bank of Pakistan’s decision to keep the benchmark policy rate unchanged at 11.5%. Highlighting that high borrowing costs are severely restricting industrial recovery, private-sector investment, and export competitiveness, the KATI chief called on the central bank to publish a clear, actionable roadmap for transitioning the policy rate into single digits as global conditions stabilize.While acknowledging external challenges such as Middle Eastern geopolitical tensions and volatile crude oil prices, Rajput emphasized that domestic manufacturers are buckling under the weight of exorbitant energy tariffs, utility hikes, and restrictive financing. He stressed that small and medium-sized enterprises (SMEs) and export-oriented units are disproportionately penalized by expensive credit, hindering modernization, job creation, and global market penetration.
Korangi Association of Trade and Industry (KATI) President Muhammad Ikram Rajput has expressed concern over the State Bank of Pakistan’s decision to maintain the policy rate at 11.5 percent, saying that high interest rates are slowing the recovery of industrial activity, new investment and the export sector.
Muhammad Ikram Rajput said that geopolitical tensions in the Middle East, concerns over a possible increase in global crude oil prices and external economic uncertainty remained important factors. However, domestic industries were also facing serious challenges, including rising production costs, high electricity and gas tariffs, and continued fluctuations in petroleum product prices.
He said further monetary easing and a gradual reduction in the policy rate were urgently needed under the prevailing business conditions. The State Bank should provide a clear and actionable roadmap for bringing the policy rate into single digits as global conditions improve, enabling industrialists to make effective investment and business plans for the future.
The KATI president said high interest rates had made borrowing increasingly expensive for the industrial sector, limiting prospects for establishing new industries, expanding existing units, increasing production capacity and investing in modern technology. Expensive financing was also raising the cost of Pakistani products and undermining their competitiveness in international markets.
He said small and medium-sized enterprises (SMEs) were among the sectors most severely affected by high interest rates. The lack of affordable financing was adversely affecting their expansion plans, employment generation and production capacity.
Muhammad Ikram Rajput demanded that the State Bank ensure easy access to loans at preferential rates for SMEs, export-oriented industries and the manufacturing sector. He said monetary policy should give equal priority to controlling inflation and promoting industrial growth, investment, exports and employment.
He said a business-friendly interest rate environment was essential to restore private-sector confidence, stimulate investment and accelerate industrial activity, which was crucial for sustainable economic growth and increasing exports.
