The State Bank of Pakistan has announced a reduction in its policy interest rate by 2 percentage points, bringing it down to 17.5%.
According to the latest monetary policy statement, the central bank has decreased the rate from 19.5% to 17.5%. This adjustment, equivalent to a reduction of 200 basis points, reflects recent trends in inflation and global commodity prices.
The State Bank highlighted that inflation has notably decreased over the past two months. Additionally, falling global prices for oil and essential food items have contributed to easing inflationary pressures.
Despite challenges such as reduced foreign exchange inflows and debt repayments, the State Bank reported that foreign exchange reserves remain stable at $9.5 billion. The bank also noted improvements in business confidence, which have supported the decision to lower the interest rate.
The reduction in the policy rate aims to foster economic growth and stabilize financial conditions by making borrowing more affordable for businesses and consumers.
