Mian Zahid Hussain, President of the Pakistan Businessmen and Intellectuals Forum & All Karachi Industrial Alliance, Chairman National Business Group Pakistan, Chairman Policy Advisory Board FPCCI, and Former Provincial Minister of Information Technology, today stated his dismay at the State Bank of Pakistan (SBP) not announcing a substantial cut in its key policy rate and maintaining the rate at 11%. He emphasized that the current restrictive monetary policy is stifling economic growth and investment, creating an “investment famine” across the nation.

Hussain stated, “While we appreciate the SBP’s commitment to price stability, its current policy rate of 11.00% is an unjustifiable burden on businesses and a significant obstacle to national progress”. He noted that with inflation now in single digits, the interest rate was justified to be reduced to nearly 6%, a figure that is reasonable to compete with Pakistan’s regional competitors.

“High borrowing costs are disproportionately impacting our small and medium-sized enterprises and making it impossible for them to expand, innovate, and create jobs,” Hussain said. He reiterated the FPCCI’s demand for an immediate, single-stroke cut of up to 500 basis points, arguing that such a move was essential to rationalize monetary policy and align it with the national imperative for economic and export growth.

Hussain urged the central bank to consider the urgent needs of the private sector and to move beyond a singular focus on price stability to one that also supports economic dynamism, competitiveness, reducing the cost of production, and boosting exports, which is necessary for filling the trade deficit and controlling dollar shortage. “The time for a bold decision was now. A substantial rate cut was not a risk; but necessary step to unlock our economy’s full potential,” he concluded.