KARACHI: While multinationals praised the State Bank’s decision to maintain the interest rate at 11 per cent, local businessmen on Monday expressed frustration over the delay in reducing the lending rate to single digits, in line with declining inflation.

Overseas Investors Chambers of Commerce and Industry (OICCI) Secretary General M. Abdul Aleem said, “We fully support the prudent decision of the SBP to retain interest rate at the current level considering the dark cloud on the horizon given serious emerging war-type situation in the region.”

He said the wait-and-see is the right approach as increased commodity prices and shipping and logistics costs are possible challenges. “All in all, a good decision is taken by the SBP,” he added.

Pakistan Business Council (PBC) Chief Executive Officer Ehsan Malik said the decision not to change the policy rate is wise.

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Atif Ikram Sheikh stated that the business community is dissatisfied with the status quo in the policy rate, as it remains based on a heavy premium compared to the Consumer Price Index (CPI).

The CPI stood at 3.5pc in May, but the policy rate remains at 11pc, reflecting a premium of 750 basis points (bps) compared to inflation, which makes no economic sense, he said.

Karachi Chamber of Commerce and Industry Chairman Muhammad Jawed Bilwani called the State Bank’s move an overly cautious and counterproductive stance, given the easing of inflation and deteriorating industrial competitiveness.

Published in Dawn, June 17th, 2025