Inflation Eases as Pakistan’s Central Bank Slashes Interest Rates
The State Bank of Pakistan has reduced the policy interest rate to 11 per cent, citing lower inflation levels. With a stunning decline in April’s inflation to 0.3 per cent, the central bank has cut rates by a total of 1,000 bps since June 2024. The rate cut is expected to promote economic growth.
- Country:
- Pakistan
On Monday, Pakistan's central bank announced a cut in the policy interest rate by 1 per cent, lowering it to 11 per cent due to easing inflationary pressures. The State Bank of Pakistan's decision came after April's inflation was recorded at a surprisingly low 0.3 per cent.
This strategic move by the Monetary Policy Committee marks a significant shift as the central bank has previously maintained a higher interest rate. Since June 2024, the policy rate has seen a reduction of 1,000 basis points.
The reduction in interest rates is largely attributed to falling prices of staple foods and reductions in electricity and fuel costs. Analysts believe this will stimulate economic growth by making loans more affordable for the business community.
(With inputs from agencies.)
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