State Bank of Pakistan, under the governance of Jameel Ahmad, has made its monetary policy decision by maintaining the interest rate at 11% for two months. It is an economically based decision that has led to profound disappointment by the business community especially the Karachi Chamber of Commerce and Federation of Pakistan Chambers of Commerce and Industry (FPCCI), which has asked for a 5 to 6% reduction.
Governor Ahmad highlighted that inflation rose in May and June, reaching 7.2%. The central bank projects inflation for the current fiscal year to range between 5% and 7%. Rising energy prices are expected to add pressure in the coming months. Despite this, foreign exchange reserves grew by $5 billion, and remittances hit $30 billion last fiscal year, with all payments cleared on time.
The FPCCI and Karachi Chamber of Commerce urged a significant interest rate reduction to boost economic growth. The unchanged rate has led to frustration among traders, who argue that lower rates are critical for business expansion and investment in Pakistan’s economy.
Business individuals, loans, and investment provisions affected by this decision. The sustainability of the 11% might have an impact on the economic recovery of Pakistan, as well as inflation management and international competition. The stakeholders are currently looking forward to additional information on changes in the monetary policy.
