PESHAWAR: Sarhad Chamber of Commerce and Industry (SCCI) on Monday expressed serious concern over the State Bank of Pakistan’s decision to raise the key policy rate by 100 basis points to 11.5 per cent, warning that the move could further slow economic and industrial activity.

In a statement issued here, SCCI president Junaid Altaf said the business community expected the policy rate to either decrease or remain unchanged in the prevailing circumstances. However, the increase, he added, was “unfavourable, unacceptable and should be withdrawn immediately.”

Mr Altaf acknowledged the challenging global economic environment, particularly in the wake of rising fuel prices, but stressed that ground realities in Pakistan must also be taken into account. He noted that business and industrial growth had already slowed due to intermittent smart lockdowns across the country.

Referring to the decision by the State Bank’s Monetary Policy Committee, he said the increase in the interest rate would raise the cost of doing business at a time when the economy was still recovering from the impact of the Covid-19 pandemic.

He further pointed out that inflation was projected to remain around seven per cent over the next 12 months, arguing that there was no justification for raising the policy rate under such conditions.

The SCCI chief warned that the higher interest rate would discourage investment, reduce employment opportunities and further dampen trade and economic activities. “The decision is not in the best interest of the country’s economy, industry or business community,” he said, urging authorities to review it.

Comparing Pakistan with neighbouring countries, Mr Altaf termed the increase “unfair” under the current economic conditions. He added that inconsistent policies had already led to economic stagnation, and the latest move would exacerbate the situation.

The chamber also cautioned that the hike could trigger a new wave of inflation and adversely affect exports.

Published in Dawn, April 28th, 2026