LAHORE/ISLAMABAD: The business community on Monday gave a mixed response to the State Bank of Pakistan’s (SBP) decision to keep the policy rate unchanged at 11.5 per cent, with some backing the move while others called for further cuts to revive investment and industrial activity.

The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has expressed disappointment over the decision of the SBP’s Monetary Policy Committee (MPC) to maintain the policy rate at 11.5pc, saying trade and industry are in dire need of some breathing space amid the current stagnation-prone economic environment.

The apex trade body has termed the decision as highly contractionary and counterproductive — warning that holding the benchmark interest rate at an oppressive level will continue to severely stifle economic activity and undermine industrial revival efforts across the country. “Monetary policy was the only, but potent, tool available to the authorities to provide some relief at the moment, but it remained unutilised,” it added.

FPCCI President Atif Ikram Sheikh said the business community had demanded a reduction in the policy rate to single-digit to help bring down the exorbitant cost of doing business. He elaborated that the central bank’s overly cautious approach directly contradicts current economic realities — and, denying much needed support to trade & industry as trade deficit has climbed by 18.1pc in July-August 2026 on year-on-year basis.

He maintained that the industry is currently battling an existential crisis driven by elevated energy tariffs, burgeoning petroleum prices, geo-economic uncertainty, and sky-high financing costs, direc­tly resulting in stagnating industrialisation across the country.

The Overseas Investors Chamber of Commerce and Industry (OICCI) termed the SBP’s decision to keep the policy rate unchanged at 11.5pc a prudent and balanced approach in the current economic environment.

It said that while inflation and core inflation remained elevated, stronger foreign exchange reserves, robust remittances and an uneven industrial recovery supported the case for avoiding further tightening at this stage.

The decision provides businesses with policy continuity and some space for investment planning; however, the pause should not be seen as a substitute for reforms, the OICCI said.

The chamber urged the government to reinforce monetary stability through fiscal discipline, energy-cost rationalisation, tax predictability, expedited tax refunds and faster ease-of-doing-business reforms so that macroeconomic stability could translate into stronger competitiveness, investment and sustainable private-sector-led growth.

The Rawalpindi Chamber of Com­merce and Industry supported the MPC’s decision to maintain the policy rate at 11.5pc, saying global inflationary pressures arising from the conflict in the Middle East involving Iran had pushed up international energy and commodity prices. As a net importer of fuel, Pakistan remains directly exposed to these shocks.

“In such an environment, a steady hand on monetary policy protects the stability that has been achieved with considerable effort over the past two years,” RCCI President Usman Shaukat said in a statement issued on Monday.

The Korangi Association of Trade and Industry President Muhammad Ikram Rajput expressed that high interest rates were slowing the recovery of industrial activity, new investment and the export sector.

Published in Dawn, September 15th, 2026