FCCI urges steep cut in policy rate ahead of September MPC meeting
The Faisalabad Chamber of Commerce and Industry called for the State Bank of Pakistan to lower the policy rate to around 5% to spur industrial activity and employment.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Positive · Buy bias
Industrial sectors like Cement, Steel, Textile and Automobile stand to benefit from cheaper financing, creating a buy bias for related tickers; banks may feel margin pressure but overall market outlook improves.
Sectors & Direction
Desk read
Desk call: Buy bias · Positively affected
- BanksPositively affected
- CementPositively affected
- SteelPositively affected
- TextilePositively affected
- AutomobilePositively affected
- EconomyPositively affected
Companies
Companies Mentioned
- INDU· Positively affected · Buy bias
Mentions in This Briefing
Sectors: Banks, Cement, Steel, Textile, Automobile, Economy — Positive · Buy bias. PSX tickers: INDU. Industrial sectors like Cement, Steel, Textile and Automobile stand to benefit from cheaper financing, creating a buy bias for related tickers; banks may feel margin pressure but overall market outlook improves.
Full Story
Open on Business Recorder## Background
Faisalabad Chamber of Commerce and Industry (FCCI) President Farooq Yousaf Sheikh appealed to the State Bank of Pakistan (SBP) to slash the policy rate ahead of the Monetary Policy Committee (MPC) meeting scheduled for 14 September.
## Rationale
Sheikh highlighted that, despite regional tensions, Pakistan’s macro‑economic indicators have shown improvement, with foreign‑exchange reserves rising. He argued that a lower policy rate would provide cheaper financing for domestic manufacturers, boost production capacity and generate new jobs.
## Current rate context
The government has already reduced the policy rate from 23 % to 11.5 % over recent years, but Sheikh noted that this level remains well above those of neighboring economies. Higher financing costs, he said, inflate the production cost of export‑oriented goods, eroding their competitiveness in global markets.
## Call for action
FCCI urged the SBP to bring the policy rate down to around 5 % to accelerate industrial output and sustain economic growth. He added that chambers of commerce nationwide have been pressing for such a reduction for several years.
## Potential market implications
A significant rate cut could lower borrowing costs for sectors such as cement, steel, textiles and automobiles, while compressing net interest margins for banks. The overall sentiment is that cheaper capital would lift corporate earnings and improve investor confidence in the Pakistan Stock Exchange.