{
  "id": 16817979,
  "title": "PHMA expresses concern over increase in policy rate",
  "url": "https://urgent.news/2026/10/27/phma-expresses-concern-over-increase-in-policy-rate",
  "topic": "business",
  "section": "Business",
  "published": "2026-10-27T23:46:09.000Z",
  "source": {
    "name": "Business Recorder",
    "slug": "business-recorder",
    "url": "https://www.brecorder.com/news/40446265/phma-expresses-concern-over-increase-in-policy-rate"
  },
  "original_language": "en",
  "account": "Faisalabad: Chairman of the Pakistan Hosiery Manufacturers & Exporters Association (PHMA), North Zone, Mian Farrukh Iqbal, has voiced serious concerns over the State Bank of Pakistan's decision to raise the policy rate by 50 basis points to 12 percent. The increase, he argues, will disproportionately impact Pakistan's textile and hosiery export sector. Iqbal highlighted that the move comes at a time when exporters are already grappling with high production costs, expensive energy, and rising operational expenses, making it a disappointing decision. Instead of boosting the economy, the policy hike will escalate the cost of doing business and diminish the competitiveness of Pakistani exporters in global markets.\n\nHe pointed out that Pakistan's borrowing costs are considerably higher than those of its regional counterparts. With the regional policy rates put at 9.5 percent in Bangladesh, 8.75 percent in Sri Lanka, and 5.5 percent in India, Pakistan's rate of 12 percent puts its exporters at a significant disadvantage. This disparity becomes particularly stark in sectors like textiles and hosiery, where international buyers demand competitive prices, quality products, and timely deliveries. Iqbal emphasized that the textile export industry needs affordable financing for various aspects such as purchasing raw materials, maintaining production, meeting working-capital needs, investing in technology, and fulfilling export orders. Higher interest rates exacerbate financial and production costs, shrink profit margins, discourage new investment, and make it increasingly challenging for exporters to match the pace of their regional competitors.\n\nMoreover, Iqbal noted that Pakistan's export sector is already under stress due to high electricity and gas tariffs, taxation, expensive borrowing, delayed refunds, and other structural issues. An additional rise in the policy rate will only exacerbate these problems, potentially dampening industrial expansion, impacting employment, and curbing export growth. At a time when foreign exchange earnings are crucial for the country's economy, Iqbal urged the State Bank of Pakistan and the federal government to take a coordinated approach that aligns with the interests of export-oriented industries. \"Pakistan requires competitive financing, affordable energy, and a stable, predictable business environment to boost exports and stimulate investment,\" he stressed. \"Our exporters cannot compete effectively on the global stage if their financing and production costs remain considerably higher than those of their competitors.\"\n\nIqbal called for the State Bank of Pakistan to reassess its monetary policy in the context of the challenges faced by export-oriented industries and advocated for a phased reduction in interest rates once economic conditions improve. He also urged the government to establish dedicated, affordable financing options specifically for textile and hosiery exporters. This would help preserve existing export orders, encourage new investments, create jobs, and bolster foreign exchange reserves. He concluded that sustainable economic growth, employment generation, and the strengthening of Pakistan's foreign exchange reserves hinge on a competitive export sector. Consequently, policies should aim to facilitate exporters through reduced financing costs and a business-friendly environment rather than adding more burdens that undermine their competitiveness in the global market.",
  "summary": "FAISALABAD: Mian Farrukh Iqbal, Chairman of the Pakistan Hosiery Manufacturers & Exporters Association (PHMA), North Zone, has expressed serious concern and strong reservations over the State Bank of Pakistan’s decision to increase the policy rate by 50 basis points to 12 percent, warning that the move will adversely affect Pakistan’s textile and hosiery export sector. He stated that the increase…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}