S. M. Tanveer expresses disappointment over SBP's decision to keep policy rate unchanged

Lahore (Web Desk): Mr. S. M. Tanveer, senior leader of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), expressed serious disappointment over the State Bank of Pakistan’s recent decision to maintain the policy rate at its existing level, stating that the central bank has failed to respond to the urgent needs of the economy.

He noted that with inflation under control and the Consumer Price Index (CPI) at a considerably low point, there is no rationale for continuing with such high interest rates, which are stifling growth, discouraging investment, slowing job creation, and putting additional strain on industries that are central to the country’s development.

In his remarks, Mr. Tanveer said that economic progress is not possible without a meaningful cut in the policy rate, which in his view should be reduced to 6 percent. Such a move, he argued, would make borrowing more affordable for businesses, stimulate economic activity, and pave the way for stronger growth.

He further emphasized the importance of lowering electricity tariffs to a regionally competitive benchmark of 9 cents per kWh, explaining that this step is critical to bringing down production costs, boosting export competitiveness, and ensuring overall prosperity.

At present, the State Bank’s policy rate is 11 percent, a level the Monetary Policy Committee (MPC) has kept unchanged since May 2025, reaffirming the stance most recently on September 15, 2025.

The decision, taken despite widespread anticipation of a cut, reflected concerns over the possibility of flood-related food inflation and renewed pressure on the currency.

Meanwhile, the Patron-in-Chief of the United Business Group (UBG) has also urged the government to act without delay in revisiting the policy rate.

 He warned that the current economic conditions require a more supportive monetary approach, adding that any further delay in reducing rates would only prolong stagnation and obstruct the path of national progress.

S. M. Tanveer called upon the government to move swiftly to create conditions that favor investment, growth, and the well-being of the business community.