President FPCCI Atif Ikram Sheikh Criticizes State Bank's Decision to Maintain Policy Rate at 11%

Karachi: Mr. Atif Ikram Sheikh, President of the Federation of Pakistan Chambers of Commerce
and Industry (FPCCI), has strongly criticized the State Bank of Pakistan's decision to maintain
the policy interest rate at 11%, calling it "anti-growth" in light of the current economic
conditions. Sheikh expressed deep concerns over the adverse impact of this decision on the
business sentiment and the broader economy.

Mr. Atif Ikram Sheikh emphasized that, given the prevailing inflation rates, the policy interest
rate should ideally be reduced to 7% to align with economic realities and foster growth. He
highlighted that a reduction in the interest rate could have led to a significant decrease in the
government's debt burden by approximately PKR. 3,500 billion – providing much-needed fiscal
relief.

Mr. Atif Ikram Sheikh highlighted that inflation has come down to 5.6% in the month of
September 2025 as per the government’s own statistics. "Pakistan’s interest rate is significantly
higher than those in other countries in the region," Sheikh noted, pointing out that the elevated
rate stifles economic activity and discourages investment. He stressed that for businesses to
thrive and remain competitive, the policy rate must be brought down to a single-digit figure.

Mr. Saquib Fayyaz Magoon, SVP FPCCI, underscored that maintaining high interest rates
directly impacts production costs, which in turn fuels inflation. "A single-digit interest rate
would lower production costs, making goods and services more affordable and ultimately
contributing to a reduction in inflation," he explained. He further noted that high interest rates
restrict access to finance, hampering economic activity and growth.

SVP FPCCI also referenced assurances from Federal Finance Minister Muhammad Aurangzeb,
who had previously indicated that a reduction in the policy rate was forthcoming in the coming
months. The decision to maintain the status quo, therefore, comes as a setback to the business
community’s expectations.

Mr. Abdul Mohamin Khan, VP & Regional Chairman Sindh, FPCCI warned that keeping the
interest rate unchanged will severely undermine the business environment, discourage
investment and hinder economic recovery. He urged the State Bank to reconsider its stance and
adopt measures that support businesses, reduce borrowing costs and stimulate economic growth.

Mr. Abdul Mohamin Khan added that the business community is the backbone of Pakistan’s
economy, stated. "A conducive monetary policy with a single-digit interest rate is essential to
boost industrial output, create jobs and stabilize prices. We call on the State Bank to take
immediate action to address these concerns and align its policies with the needs of the economy.