FPCCI Denounces Status Quo in Monetary Policy US-Iran Peace Deal Will Ease Inflationary Pressures Atif Ikram Sheikh, President FPCCI

Karachi: Mr. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of
Commerce & Industry (FPCCI), has denounced the status quo in the contractionary
monetary policy by the State Bank of Pakistan in its Monetary Policy Committee (MPC)
meeting held on Monday.

Mr. Atif Ikram Sheikh highlighted that a static policy rate in the double digits is highly
detrimental to the nation’s economic survival; and, failure to ease borrowing costs will
accelerate de-industrialization and severely compromise export targets – which are
highly-critical for earning precious foreign exchange for the country, he added.

Mr. Atif Ikram Sheikh expressed his concern over the central bank’s disconnect from
challenges being faced by trade and industry. The decision to hold the policy rate is
unfortunate, despite a clear downward expectation in inflation numbers on the back of the
impending US-Iran peace deal being facilitated by Pakistan; and, gradual normalization of
global energy supplies.

Mr. Atif Ikram Sheikh explained that we are witnessing a cost of doing business crisis
across the manufacturing landscape. The SBP's overly cautious, contractionary stance is
starving the private sector of essential capital. We reiterate our unwavering demand that
the economy cannot transition to a growth model without a rationalized, single-digit
interest rate that aligns with the realities of the domestic market; and, the vision of the
Special Investment Facilitation Council (SIFC).

Mr. Saquib Fayyaz Magoon, SVP FPCCI, highlighted the unsustainability of the current
economic environment. The benchmark policy rate has created an artificially high cost of
capital that no legitimate business can absorb. Our regional competitors are operating with
significantly lower borrowing costs, rendering Pakistani exports fundamentally
uncompetitive in the global arena. Maintaining the status quo only penalizes SMEs and
large-scale manufacturing alike, effectively halting capacity expansion and job creation, he
added.

Mr. Abdul Mohamin Khan, VP and Regional Chairman Sindh, FPCCI, emphasized that
the impact of this prolonged high-interest-rate environment is catastrophic. We are seeing
factory closures and scaled-back operations across the industrial heartlands. The status quo
is not a measure of stability; it is a recipe for stagnation. The industrial sector requires
immediate, tangible relief to stay afloat, pay exorbitant energy tariffs, and maintain their
workforce, he added.

The FPCCI leadership collectively reiterates its demand for an urgent and substantial
monetary easing cycle. The apex body calls upon the Federal Government, the Ministry of
Finance, and the Governor SBP to immediately reassess this counterproductive approach
and implement a decisive rate cut in the next MPC – and, bring it in the dingle digits.

FPCCI maintains that without transitioning swiftly from a stabilization model to an
aggressive, export-led growth framework, the country risks permanent stagnation in its
industrial base.

Brig Iftikhar Opel, SI (M), Retd.
Secretary General