RCCI Urges SBP to Cut Policy Rate to Single Digit

News Desk

Rawalpindi: President of the Rawalpindi Chamber of Commerce and Industry (RCCI), Usman Shaukat, has urged the State Bank of Pakistan (SBP) to reduce the policy rate to a single digit in the upcoming Monetary Policy Committee (MPC) meeting, citing the urgent need to ease the cost of doing business and restore investor confidence.

In a statement issued on Sunday, Shaukat emphasized that Pakistan’s current interest rates are among the highest in the region, hampering industrial growth and discouraging both domestic and foreign investment.

“Interest rates in regional economies are significantly lower—Vietnam at 6.3%, Cambodia at 3%, Indonesia at 6%, and India at 5.5%. In contrast, Pakistan’s borrowing costs are creating a financial chokehold on businesses,” he said.

The RCCI President also highlighted the burden of rising energy tariffs on the country’s competitiveness. “Electricity costs in Pakistan average around 16 cents per unit, while comparative rates in Bangladesh, Vietnam, Cambodia, Indonesia, India, and Sri Lanka range from 5 to 10 cents per unit,” he pointed out.

Shaukat advocated for at least a 3% cut in the policy rate, saying it would provide critical relief to the private sector—particularly small and medium-sized enterprises (SMEs), which are struggling under high financing costs.

He further noted that the uncompetitive business environment in Pakistan is driven not only by high interest rates but also elevated utility tariffs, heavy taxation, high minimum wages, and low labour productivity.

“These structural inefficiencies are suppressing industrial output, stalling investment, and eroding business confidence,” he warned. “Most industries are operating below capacity, and job creation is stagnating.”

Shaukat cautioned that maintaining outdated monetary policies would worsen economic conditions, increase unemployment, and reduce revenue collection.

He concluded by reiterating RCCI’s call for immediate monetary and structural reforms to revive industrial activity, attract investment, and improve Pakistan’s regional competitiveness.