RECORDER REPORT

ISLAMABAD: All Pakistan Textile Mills Association (Aptma) has expressed deep dismay over the Monetary Policy Committee’s (MPC) decision to maintain the policy rate at an unsustainably high 11 percent in its meeting held on Monday.

According to Chairman Aptma Kamran Arshad with inflation recorded at just 3 percent in August 2025 (PBS), this decision locks in a real interest rate of 8 percent, among the highest in the world. Such an aggressive monetary stance is not only unjustified by prevailing macroeconomic conditions but is also detrimental to industrial recovery and economic growth.

Interest rates should be aligned with inflation trends and business cycle needs. An 8 percent real interest rate is virtually unheard of and is choking business sentiment, stifling investment and pushing the industry further into crisis.

The textile industry, Pakistan’s largest export sector and a critical source of employment, continues to face mounting pressure due to high energy costs, abnormal taxation and an overall poor business environment. Export orders remain weak, mills are operating below capacity, and no new investment is being made due to policy uncertainty and excessive cost of borrowing.

“Aptma strongly urges the MPC to recalibrate the monetary policy framework, considering the 3 percent inflation and the need to support economic revival,” Chairman APTMA said adding that at a time when inflation is largely under control, maintaining prohibitively high interest rates is counterproductive. The economy simply cannot move forward under such restrictive financial conditions.

Aptma has reiterated its call to reduce the policy rate to 9 percent in line with current inflation and regional benchmarks and announce a roadmap to further reduce the rate to 6 percent by end of-year.