RAWALPINDI: The Rawalpindi Chamber of Commerce and Industry (RCCI) has criticised the State Bank of Pakistan (SBP) for maintaining the policy interest rate at an excessively high level of 11 per cent.

The decision has sparked frustration among the business community, which had widely anticipated a significant rate cut to single digits in order to spur economic revival.

RCCI President Usman Shaukat warned that this decision will prolong stagflation, deter investment and adversely affect employment generation.

`The private sector is under immensestrain, and the SBP`s inaction is exacerbating the challenges faced by manufacturers and exporters,` he stated.

RCCI urged the government and the centralbank to reconsider their approach and bring down the policy interest rate to single digits.

`A growth-oriented monetary policy is urgently required to reinvigorate economic activity, protect jobs, and ensure the sustainability of businesses,` he emphasised.

In a statement issued on Thursday, the RCCI president said the SBP`s reasoning, citing temporary inflationary pressures in May and June and possible energy price hikes in the coming months was neither compelling nor aligned with the ground realities of Pakistan`s economic situation.`Core inflation has substantially receded, and macroeconomic indicators clearly support an easing of monetary policy.

`Maintaining such a high borrowing cost is unjustified and will continue to hamper growth,` he remarked.

He added that despite signs of economic stabilisation, SBP had missed a critical opportunity to support businesses, especially small and medium enterprises (SMEs) and export-oriented industries.

`The high interest rate has restricted working capital flows, raised default risks and escalated the cost of doing business.

This is eroding our competitiveness in global markets and stifling industrial recovery,` he observed.