Pakistan’s policy rate cut sparked mixed reactions across the business community on Monday. The State Bank reduced rates by 50 basis points. Therefore, the policy rate now stands at 10.50 percent. Many observers say the policy rate cut Pakistan needed was larger.
Foreign investors welcomed the move and called it cautious and balanced. OICCI said lower borrowing costs may support business activity. Moreover, it said gradual easing helps protect economic stability. However, expectations for stronger relief remain high.
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In contrast, local industry leaders strongly criticized the policy rate cut Pakistan announced. They said the reduction was too small to revive production. Additionally, they argued high financing costs still block investment. Inflation has eased, but borrowing remains expensive.
Business groups compared Pakistan with regional economies. Countries like India and Bangladesh maintain single-digit rates. As a result, their industries grow faster and stay competitive. Meanwhile, Pakistan’s high rates force closures, job losses, and delayed expansion.
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Industry leaders urged deeper cuts to support growth and employment. They warned businesses cannot survive prolonged high rates. Unless rates reach single digits, recovery will remain weak. Many insist a stronger policy rate cut Pakistan needs is urgent.