A senior leader of Pakistan's top trade body has expressed profound disappointment with the Monetary Policy Committee’s decision to maintain the current policy rate, labelling the move a discouraging blow to the nation’s commercial and industrial sectors.

In a statement, Saquib Fayyaz Magoon, Senior Vice President of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), asserted that the central bank's stance completely contradicts the expectations of the country’s business community.

Magoon, who also serves as Chairman of the Businessmen Panel Progressive (BMPP), pointed out that with inflation having receded to 5.6 per cent, there was significant scope for a rate reduction. "The State Bank could have easily brought interest rates into single digits, but failing to do so is discouraging for the business community," he stated.

Explaining the rationale, the FPCCI official referenced a global principle where interest rates are typically set by adding a positive real rate of two to four per cent to the prevailing inflation. "If inflation is at 5.6 percent, then the policy rate should ideally be between 7.6 and 9.6 percent. This is a level the State Bank could have adopted without difficulty," Magoon noted.

He revealed that businesses had anticipated a substantial cut to at least seven to eight per cent, which would have provided much-needed relief and stimulated economic activity.

Magoon added that the cost of financing is already "unbearable" and, combined with surging business expenses and exceptionally high energy tariffs, the elevated interest rates are severely squeezing industrial and commercial operations.

Concluding his statement, he issued an urgent call for the government and the central bank to reconsider their position in light of ground realities. He emphasised, "A single-digit interest rate is not only possible but essential for economic revival and restoring business confidence."