KARACHI: The State Bank of Pakistan (SBP) on Monday announced to cut the policy rate by 150 basis points, marking its first rate reduction in nearly four years.
The decision to cut the key rate to 20.5% comes two days ahead of the budget announcement and a week after data showed inflation slowed to a 30-month low of 11.8% in May.
The SBP last changed rates in an emergency meeting in late June last year, when it raised rates by 100 basis points to a record high of 22%.
Economic activity slowed over the last two years in Pakistan as it implemented tough reforms under an International Monetary Fund (IMF) bailout in a bid to stabilise its crashing economy.
Finance Minister Muhammad Aurangzeb, speaking at a business conference in China last week, said he expected rates to come down in the face of falling inflation.
More to follow….
