KARACHI: The State Bank of Pakistan's recent decision to maintain the policy interest rate at 11 percent has drawn criticism from Muhammad Ikram Rajput, President of the Korangi Association of Trade and Industry (KATI). The rate, unchanged for the fourth consecutive Monetary Policy Committee meeting, is seen as a setback for industrial and commercial sectors amid attempts at economic recovery.

Ikram Rajput voiced concerns that the decision contradicts efforts to rejuvenate the economy, especially as inflation has eased to 5.6 percent. He argues that the high interest rate is detrimental to industry, exacerbating challenges such as rising production costs and expensive energy, compounded by weak demand.

The industrial sector, already grappling with increased gas and electricity tariffs, finds itself further burdened by the unchanged rate, according to Rajput. The expectation among industrialists was for a reduction of at least 1 to 1.5 percent to encourage investment and job creation.

In Karachi's industrial areas, including the Korangi Industrial Area, Rajput highlighted that high borrowing costs are hindering small and medium-sized enterprises (SMEs) from accessing necessary financing. This is adversely affecting production, exports, and employment opportunities.

Rajput urged the government and the State Bank to act swiftly in supporting industrial and export sectors by reducing the policy rate, lowering energy costs, implementing tax reforms, and encouraging investment. He emphasized the critical role of industry in the national economy and warned that ignoring business challenges could hinder economic recovery.