Commerce Desk
KARACHI :President of the North Karachi Association of Trade and Industry (NKATI), Faisal Moez Khan, has termed the State Bank of Pakistan’s decision to increase the policy rate by 50 basis points unacceptable to the business community.
He said the decision would deal a severe blow to ongoing efforts to achieve economic stability, slow industrial growth, and further weaken the export competitiveness of Pakistani products in international markets. He added that raising the policy rate to the high level of 12 percent would further aggravate the challenges faced by the industrial sector.
Faisal Moez Khan stated that a 12 percent policy rate would undermine the competitiveness of Pakistan’s economy compared with regional countries. He said there was no need to increase interest rates under the prevailing circumstances. Instead, the business community urgently needed access to low-cost financing and economic incentives to boost domestic production, sustain business activities, and create new employment opportunities.
He maintained that rather than effectively contributing to price stability, the increase in interest rates was placing an additional burden on manufacturing industries. This could force formal businesses to shut down or scale back their operations.
Faisal Moez Khan further said that high interest rates would make borrowing more expensive for businesses, negatively affecting new investment, industrial expansion, and productive activities.
