KARACHI: Saquib Fayyaz Magoon, Senior Vice President Federation Pakistan Chambers of Commerce & Industry (FPCCI) and Chairman Businessmen Panel-Progressive (BMPP) has strongly condemned the State Bank of Pakistan’s (SBP) recent decision to raise the key policy rate by one percent, terming it “severely damaging” for the business community and the national economy.
In a sharp reaction, Saquib Fayyaz Magoon stated that the hike was contrary to the expectations and demands of the business community, which had been advocating for a reduction, or at least a hold, on the interest rate to support growth.
“Pakistani exporters are already grappling with fierce competition in global markets,” Mr. Magoon said. “When the cost of doing business rises due to such measures, the impact is not contained to just one percent. It cascades, ultimately increasing production and export costs by two to four percent, making our products uncompetitive.”
He argued that the government should have avoided this decision given the country’s existing challenges with high inflation, elevated fuel prices, and global economic Magoon suggested that with the anticipated decline in global oil prices, inflation would naturally subside, making a rate this juncture premature and ill-advised.
“A better course would have been to postpone this increase until monetary policy committee meeting to assess the evolving situation,” he added.
Saquib Magoon emphasized that the business community is already under severe financial strain, and such moves not only shake investor confidence but also directly harm export performance. He called upon the government to immediately review and reverse the one percent increase in the interest rate, especially if global negotiations yield positive results and conditions improve.
He urged the government to prioritize the challenges faced by businesses and work towards reducing the interest rate to help Pakistan maintain its competitive edge in international markets.