KARACHI – State Bank of Pakistan slashed its key policy rate by 100 basis points to 12 percent on Monday, the central said in a statement, after sixth straight reduction.
The country of 242 million is taking stern measures to revive sluggish economy as inflation cools down and latest move makes this year’s cuts one of the most aggressive among emerging market central banks in the current easing cycle.
Pakistan Interest Rate Update
In a presser, State Bank Governor Jameel Ahmed said Monetary Policy Committee (MPC) reviewed all factors and decided to cut interest rate. He sheds light at positive shift in remittances and foreign exchange reserves, signaling an improvement in key economic areas, and noted that inflation figures were expected to move down next month.
Despite positive trends, SBP Governor called for moving in a cautious approach, saying “Considering the current economic conditions, we opted for a careful strategy”. He also pointed out that the positive trends in remittances and export performance were beneficial for the country’s current account balance.
Consumer inflation rate dropped to 4.1% in December-24, which is lowest in over 6.5years, supported by high comparison base from the previous year. This marks a significant decline from the 40pc inflation seen in May-23.
The country with an economy of $350billion is moving toward economic recovery, aided by $7 billion loan secured by International Monetary Fund (IMF).
This is a developing story, More to follow…
