Pakistan Chemicals & Dyes Merchants Association (PCDMA) has expressed deep disappointment over the State Bank of Pakistan’s decision to raise the policy rate by one percent, warning that the move will push the national economy toward further slowdown and adversely affect business activity.

In a statement, PCDMA Chairman Salim Valimuhammad said the timing of the increase was particularly damaging, as global economic uncertainty already weighs heavily on Pakistan’s trade and industry. He argued that raising interest rates under the pretext of controlling inflation was neither a new nor effective solution, but rather a failed prescription that has historically burdened traders and industrialists.

“When interest rates rise, economic activity slows down. This is not a new phenomenon — we have been highlighting this from the very beginning. The opportunity to reduce rates was missed when conditions were favorable, and now, amid rising fuel prices and mounting inflationary pressures, the decision to hike rates will only worsen the situation,” he remarked.

Salim Valimuhammad stressed that the government and the central bank must take the concerns of the business community seriously. He urged policymakers to adopt a pro-growth monetary stance by reducing interest rates to stimulate industrial and commercial activity, generate employment opportunities, and strengthen economic stability.