KARACHI: The decision of State Bank of Pakistan (SBP) to lower the policy rate by 50 basis points to 10.50pc drew mixed reactions on Monday, with a foreign investors\u2019 body welcoming it while the country\u2019s wider business community criticised it as marginal and ineffective for boosting local production and exports.<\/p>\n
The Overseas Investors Cham\u00adber of Commerce and Industry (OICCI) viewed the rate cut as a prudent measure.<\/p>\n
\u201cThe State Bank has taken a cautious and measured step to ease financing conditions,\u201d OCCI\u2019s Secretary General and Chief Executive Abdul Aleem said.<\/p>\n
Mr Aleem said the unexpected reduction is positive and will help stimulate business activities by lowering borrowing costs while preserving overall economic stability.<\/p>\n
MNCs\u2019 association terms SBP move \u2018cautious\u2019 for fostering stability<\/p>\n
He added that the chamber notes that a gradual approach \u201callows businesses to plan investment decisions with greater confidence and helps ensure that the impact of ease remains aligned with sustainable economic growth objectives\u201d.<\/p>\n
However, local business leaders expr\u00adessed immediate and deep disappointment, arguing the minor adjustment fails to address the severe challenges they face.<\/p>\n
\u201cSuch a token adjustment falls far short of what is urgently required to revive Pakistan\u2019s fragile economy and restore business confidence,\u201d Karachi Chamber of Commerce and Industry (KCCI) President Muhammad Rehan Hanif said.<\/p>\n
Mr Hanif said the marginal cut neither reflects prevailing economic realities nor offers meaningful relief to businesses struggling under an exceptionally high cost of doing business. Despite a visible decline in inflation, borrowing costs in Pakistan remain among the highest in the region, he said.<\/p>\n
\u201cRegional economies such as China, India, Bangladesh, Viet\u00adnam, Indonesia and Sri Lanka maintain single-digit interest rates, enabling their industries to access affordable financing, expand capacity, and remain competitive in global markets, while the situation in Pakistan is opposite,\u201d Mr Hanif said.<\/p>\n
Mr Hanif noted when the cost of financing remains prohibitively high, businesses defer expansion plans, shut down marginal units, and reduce employment, ultimately leading to lower economic output and reduced government revenues.<\/p>\n
Echoing that sentiment, leaders from other major trade bodies said the small reduction would fail to encourage new investment or create jobs.<\/p>\n
\u201cThe 50 basis point cut would not resolve the industries\u2019 problems and fail to boost exports under the challenging business environment,\u201d Federation of Pakistan Chambers of Commerce and Industry\u2019s (FPCCI) Senior Vice President Saquib Fayyaz Magoon said.<\/p>\n
\u201cThe interest rate should be brought down to a single digit to at least come at par with regional peers.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"
KARACHI: The decision of State Bank of Pakistan (SBP) to lower the policy rate by 50 basis points to 10.50pc drew mixed reactions on Monday, with a foreign investors\u2019 body welcoming it while the country\u2019s wider business community criticised it as marginal and ineffective for boosting local production and exports. The Overseas Investors Cham\u00adber of […]<\/p>\n","protected":false},"author":1,"featured_media":14232,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-14231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-news"],"_links":{"self":[{"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=\/wp\/v2\/posts\/14231","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14231"}],"version-history":[{"count":1,"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=\/wp\/v2\/posts\/14231\/revisions"}],"predecessor-version":[{"id":14233,"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=\/wp\/v2\/posts\/14231\/revisions\/14233"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=\/wp\/v2\/media\/14232"}],"wp:attachment":[{"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14231"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14231"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/weeklyyoung.pk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14231"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}