Islamabad, April 26,2026: President of the Federation of Pakistan Chambers of Commerce and Industry, Atif Ikram Sheikh, has urged the State Bank of Pakistan to refrain from increasing the policy interest rate beyond 10.5%, warning that higher rates could negatively impact economic activity.
In a statement issued on Sunday, Sheikh said that the recent rise in inflation is temporary and largely driven by the evolving regional situation, adding that there is no immediate need for a rate hike. He emphasized that increasing interest rates under current economic conditions would be harmful to businesses and could slow down industrial and commercial activities.
The FPCCI president highlighted that elevated borrowing costs tend to discourage investment and hinder job creation. He stressed that reducing the interest rate would help stimulate economic growth and support businesses during a period of regional uncertainty.
“Given the tense regional environment, pro-business policies are essential to support the economy,” Sheikh said, adding that Pakistan must adopt a cautious and balanced monetary approach.
He further noted that persistently high interest rates could have broader negative consequences for the economy, particularly at a time when uncertainty in the region demands careful policymaking. Sheikh projected that average inflation is likely to remain around 7.5% over the next 12 months.
Calling the recent inflationary spike a result of temporary factors, he reiterated that tightening monetary policy would not address the root causes of inflation but could slow down the pace of economic recovery.
He urged the central bank to strike a balance between controlling inflation, managing global price trends, and ensuring economic stability while making its policy decisions.
