Textile Exporters Decry SBP's 50-Basis-Point Rate Rise

Pakistan's textile exporters say the State Bank's 12% policy rate will hurt competitiveness and raise costs amid soaring energy and shipping expenses.

NationPulse Desk

Oct 26, 2026 · 10:10 PM 1 min read

Key takeaways

The State Bank of Pakistan raised the policy rate by 50 basis points to 12%.

PTEA says the increase adds to pressures from high energy, raw material and shipping costs.

China's general business lending rate averages 3.04%, lower than Pakistan's new rate.

Shipping expenses have reportedly risen by nearly 200%, according to PTEA.

The association urges the government to create an export-focused policy and improve SME financing.

Pakistan's textile exporters have condemned the State Bank of Pakistan's decision to lift the policy rate by 50 basis points to 12%, warning that the higher borrowing costs will erode the sector's competitiveness abroad. The Pakistan Textile Exporters Association (PTEA) said the move adds to existing strains from costly energy, raw materials and freight charges.

PTEA Chairman Rehan Naseem Bharara explained that steeper interest rates will raise working-capital expenses, deter investment and make it tougher for domestic producers to match exporters in India, Vietnam and China. He pointed out that firms in those nations enjoy cheaper financing, noting that general business lending in China averages 3.04%, while industrial and SME loans in India and Vietnam are also offered at lower rates in several brackets.

Vice Chairman Haris Yousaf added that exporters are already finding it difficult to fund daily operations and buy raw inputs. He cautioned that the surge in borrowing costs together with shipping fees, which have reportedly risen by almost 200%, could sap export growth and broader economic activity.

The association called on the government to adopt an export-oriented policy framework, enhance financing options for small and medium enterprises, and lower production costs throughout the textile value chain.