Pakistan Eyes Interest Rate Cuts: Central Bank's Next Move

In a strategic financial development for Pakistan, Finance Minister Mohammed Aurangzeb expressed optimism regarding a potential reduction in the country's key policy rate, currently held at 11%. This sentiment was shared at an event in Islamabad, as stakeholders await the central bank's next announcement scheduled for September 15.

Despite widespread expectations for a reduction during its last meeting, the State Bank of Pakistan maintained the policy rate at 11% on July 30. The decision surprised market analysts, who largely predicted a cut, fueled by the anticipation of easing against rising costs.

The decision to keep rates steady was primarily driven by increasing inflation concerns, notably in the energy sector. These inflationary pressures had previously prompted analysts to forecast various rate cuts ranging from 25 to 100 basis points.

(With inputs from agencies.)