PHMA concerned over SBP's decision to raise policy rate

The Pakistan Hosiery Manufacturers and Exporters Association (PHMA) has criticised the State Bank of Pakistan’s 50-basis-point increase, which took the policy rate to 12 percent. Business Recorder reported that PHMA believes the higher rate will add to financing pressure on exporters already facing steep production expenses and competition from regional suppliers. PHMA North Zone Senior Vice Chairman Izhar-ul-Haq said the move could weaken the position of value-added textile and hosiery businesses, where overseas customers are sensitive to prices.

The association compared Pakistan’s rate with Bangladesh at 9.5 percent, Sri Lanka at 8.75 percent and India at 5.5 percent, arguing that this difference disadvantages local exporters. It called on the government and the central bank to consider lower-cost financing, reduced energy and production expenses, faster settlement of refunds, and a more stable setting for industrial investment. PHMA also linked export expansion to jobs and foreign-exchange earnings.