Business community rejects hike in interest rate

Business groups have condemned the State Bank of Pakistan’s latest 0.5 percentage-point increase, which lifted the policy rate from 11.5 percent to 12 percent, Business Recorder reported. Federation of Pakistan Chambers of Commerce & Industry President Atif Ikram Sheikh said higher financing costs could constrain investment, production and the ability of Pakistani goods to compete in local and overseas markets.

Representatives of the SITE Association of Industry and Federal B Area Association of Trade and Industry also objected, saying the increase would add to companies’ borrowing costs and make credit harder to obtain, particularly for small and medium enterprises. They described factories as operating under pressure, with some running well below capacity, and urged the government and SBP to consider lowering rates or reviewing policy in response to industry concerns.