The State Bank of Pakistan (SBP) has increased the policy rate by 100 basis points to 11.50 percent. This decision takes effect from April 28, 2026, following the Monetary Policy Committee meeting on April 27.
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Business Community Reacts Strongly
Pakistan Business Forum (PBF) expressed surprise over the rate hike. They questioned why the government continues to overlook the ease of doing business. The increase in interest rates will create further difficulties for the private sector in accessing loans. This was stated by PBF President Khawaja Mahboob-ur-Rehman. Current business costs in Pakistan are already 34 percent higher than in the region. The forum highlighted this gap as a major challenge for competitiveness.
Impact on Investment and Growth
Business leaders expected a single-digit interest rate to encourage both local and foreign investors. The hike has dashed those hopes. PBF urged the government to seize the opportunity to bring back Pakistani investments from Dubai. They said serious policy measures are needed for this. Just three days ago, the government raised petroleum levy by Rs27. Now this rate increase adds more pressure on businesses.
Calls for Rupee Stability
PBF believes the upcoming budget will focus heavily on new taxes. They see the monetary policy as a clear signal in this direction. If the IMF is effectively running the economy, the business community should be informed clearly. The forum demanded transparency. Considering current foreign exchange reserves, the rupee should be around 240 against the US dollar, according to PBF. Rapid depreciation of the rupee was a key reason for economic distortions. Strengthening the currency could resolve half the problems.
Way Forward
The economy now needs to shift towards growth. Bold decisions are inevitable for sustainable recovery.
The government must create a business-friendly environment. In return, the business community is ready to provide full economic support. PBF also noted that while UAE investments were returned, Pakistani taxpayers continue to pay $207 million in annual interest on related debts.
Keywords: SBP Policy Rate, Pakistan Business Forum, Interest Rate Hike
Meta Description: SBP raises policy rate by 100bps to 11.50%. Pakistan Business Forum criticizes the move, warning of higher borrowing costs and challenges for private sector growth and investment.