KARACHI: Pakistan’s top trade and industry body on Wednesday called for a 500-basis-point (bps) cut in the policy rate, saying businesses remained dissatisfied with monetary policy and viewed interest rates as excessively high despite inflation hitting a nine-year low.
Earlier this month, the government announced inflation had fallen to 1.5 percent in February, down from 2.4 percent in January. However, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) noted the policy rate remained at 12 percent following what it called a “grossly-insufficient reduction of merely 100 bps” in the January 27 Monetary Policy Committee (MPC) meeting.
“After deliberations across all industries and sectors, FPCCI demands an immediate and single-stroke rate cut of 500 basis points in the upcoming MPC meeting on March 10, 2025, to rationalize the monetary policy,” FPCCI President Atif Ikram Sheikh said in a statement.
He added the country’s monetary policy should align with the Special Investment Facilitation Council (SIFC) and the government’s broader vision for economic and export-led growth.
Sheikh said industry estimates suggest core inflation will remain between 1-3 percent in the fourth quarter of FY25 (April-June 2025) due to declining prices and easing inflationary pressures.
He argued with international oil prices expected to stay stable, the government had the conditions necessary to announce a substantial rate cut.
FPCCI Senior Vice President Saquib Fayyaz Magoon also urged policymakers to bring interest rates into single digits to allow Pakistani exporters to compete internationally.
He added that a rate cut should be accompanied by the government’s promised rationalization of electricity tariffs for industries to ensure sustainable growth.
Pakistan has historically maintained a tight monetary stance to curb inflation and stabilize the economy, but the latest calls for aggressive easing highlight growing concerns from businesses over stagnating investment and sluggish industrial activity.
Pakistan’s top trade body demands 500 bps interest rate cut as inflation hits nine-year low
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Pakistan’s top trade body demands 500 bps interest rate cut as inflation hits nine-year low
- FPCCI says businesses are dissatisfied with monetary policy since interest rates remain excessively high
- It says monetary policy should be aligned with government’s vision for economic and export-led growth
Pakistan military says 12 soldiers killed in border fighting as Kabul calls for dialogue
- Military says 274 Afghan fighters killed, over 400 injured in ongoing operation
- Afghan authorities earlier said 55 Pakistani soldiers killed in retaliatory strikes
ISLAMABAD: Pakistan’s military said on Friday 12 soldiers had been killed in cross-border fighting with Afghan forces, as it detailed the scale of an ongoing border operation and accused the Kabul government of coordinating with militant groups targeting Pakistan.
The announcement followed days of escalating hostilities triggered by Pakistani airstrikes earlier this week on what Islamabad said were Tehreek-e-Taliban Pakistan (TTP) and Daesh militant camps inside Afghanistan. Since then, both governments have reported retaliatory operations and issued conflicting casualty figures, marking the most serious deterioration in relations between the neighbors in recent months.
The 2,600-kilometer (1,600-mile) shared frontier between the two nations, a key trade and transit corridor, has remained closed to trade and movement since October 2025 amid recurring tensions.
Lt. Gen. Ahmed Sharif Chaudhry, director general of Inter-Services Public Relations (ISPR), told a news conference in Rawalpindi that Pakistani forces had repelled coordinated attacks at 53 locations along the border and responded under what he described as Operation Ghazab lil-Haq.
“While safeguarding Pakistan’s honor and territorial integrity, 12 brave soldiers have embraced martyrdom in the operation so far, while 27 have been injured and one soldier is missing in action,” he said.
Chaudhry said Pakistan had destroyed 274 Taliban posts and positions and more than 400 fighters were injured, describing those figures as conservative estimates. He added that 73 posts were completely destroyed along the border and 18 had been captured.
He said Afghan Taliban forces had launched physical raids “in collusion and in support of an internationally declared terrorist organization” and accused the Taliban administration of acting in coordination with militant groups.
“The Afghan Taliban regime is the master proxy of these terrorist proxies which are operating from Afghanistan,” he said.
Kabul has repeatedly said it does not allow militants to operate in its territory.
Chaudhry said Pakistan had targeted 22 locations across the border, including in Kabul, Kandahar, Paktia, Nangarhar, Khost and Paktika.
“All targets were selected with great care based on intelligence. They were military objectives, and utmost care was taken to avoid any civilian collateral damage,” he said.
He said the Taliban authorities faced a choice.
“Either they choose terrorists and terrorism or side with Pakistan,” he said.
KABUL CALLS FOR DIALOGUE
Separately on Friday afternoon, Afghan Taliban spokesperson Zabihullah Mujahid called for talks to resolve the crisis.
“We have always emphasized peaceful resolution, and now too we want the issue to be resolved through dialogue,” he said.
In a detailed statement earlier in the day, Afghanistan’s Ministry of National Defense said it had carried out airstrikes inside Pakistan in response to what it described as Pakistani “aerial incursions” into Kabul, Kandahar and Paktia.
Afghan officials said 55 Pakistani soldiers were killed and that several posts were captured, claims denied by Islamabad.
None of the casualty figures or battlefield claims from either side could be independently verified.
Pakistan’s Information Minister Attaullah Tarar earlier said militants had attempted to launch drones inside Pakistani territory.
“Fitna al khawarij terrorists have attempted to launch small drones in Abbotabad, Swabi and Nowshera. Anti Drone Systems have brought down all the drones. No damage to life,” Tarar said.
“The incidents have again exposed direct linkages between Afghan Taliban Regime and Terrorism in Pakistan.”
Separately, Prime Minister Shehbaz Sharif on Friday visited General Headquarters (GHQ) in Rawalpindi, where he was briefed by the military leadership on the evolving situation.
According to a statement from the Prime Minister’s Office, Sharif said there would be “zero tolerance” toward what he described as collusion between the Afghan Taliban regime and militant elements.
“Pakistan knows very well how to defend itself against any aggression,” the statement quoted him as saying, adding that the armed forces were ready to safeguard the country.
Regional concern
Cross-border violence has intensified in recent weeks, with Pakistan blaming a surge in suicide bombings and militant attacks on insurgents it says are based in Afghanistan. Kabul denies providing safe havens and says Pakistan’s security challenges are an internal matter.
The latest clashes mark the third major escalation between the neighbors in less than a year. Similar strikes last year triggered weeklong fighting before Qatar, Türkiye and other regional actors mediated a ceasefire in October.
Several countries, including China, Russia, Saudi Arabia and Iran, have expressed concern and urged restraint.
Operations on both sides were ongoing as of Friday evening.
