FPCCI Criticises SBP for Holding Policy Rate at 11.5% Amid Stagnating Industry
The Federation of Pakistan Chambers of Commerce and Industry says the central bank’s decision to keep the benchmark rate at 11.5% will deepen financing costs and hurt manufacturing, exports and overall economic activity.
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Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Higher policy rate hurts industrial and manufacturing firms, so avoid related stocks; watch for any policy easing.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- EconomyNegatively affected
- MarketsNegatively affected
- ManufacturingNegatively affected
- SteelNegatively affected
- CementNegatively affected
Companies
Companies Mentioned
- INDU· Negatively affected · Do not buy
Mentions in This Briefing
Sectors: Economy, Markets, Manufacturing, Steel, Cement — Negative · Do not buy. PSX tickers: INDU. Higher policy rate hurts industrial and manufacturing firms, so avoid related stocks; watch for any policy easing.
Full Story
Open on ProPakistani## FPCCI’s Reaction to SBP’s Monetary Policy
The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has publicly expressed disappointment with the State Bank of Pakistan’s (SBP) latest monetary policy decision, which left the key policy rate unchanged at 11.5 percent.
## Concerns Over High Borrowing Costs
FPCCI President Atif Ikram Sheikh labeled the move “contractionary” and warned that the elevated benchmark rate will continue to restrict credit flow to businesses. He argued that monetary policy is one of the few levers that can provide immediate relief, yet it was not employed to lower the cost of capital.
## Economic Context
Sheikh highlighted that the trade deficit rose by 18.1 % in July‑August 2026 compared with the same period a year earlier, signalling worsening external balances. He also pointed to high energy tariffs, rising petroleum prices, and broader geoeconomic uncertainty as compounding pressures on the industrial sector.
## Impact on Manufacturing and Exports
According to the FPCCI, manufacturers are struggling to secure working capital, which is curbing production and limiting growth. The high cost of financing is also eroding export competitiveness, causing Pakistani exporters to lose market share to regional rivals that benefit from lower interest rates.
## Call for Policy Reversal
Sheikh urged the SBP to reconsider its stance and introduce measures that would ease financing conditions, support industrial continuity, and help revive export performance.
## Market Implications
The continued high policy rate is expected to dampen credit uptake by SMEs and large manufacturers, potentially slowing activity in sectors that are sensitive to financing costs, such as cement, steel and other industrial equities.