SBP announces a 2.5% interest rate cut

The State Bank of Pakistan (SBP) on Monday announced a significant cut in interest rates by 2.5 percent from 17.5 percent to 15 percent.

According to details, this was the fourth consecutive decline, representing a decline of seven percent over the period. The decision was taken at a meeting of the Monetary Policy Committee (MPC), chaired by the Governor of the State Bank of Pakistan (SBP), where the current micro and macroeconomic conditions were thoroughly assessed.

The SBP noted that both local and international economic indicators were assessed as part of the decision-making process.

According to the central bank, the measures were aimed at stabilizing the Pakistani rupee, controlling inflation and increasing foreign exchange reserves.

Recent data show that inflation fell to a four-year low of 7.2 percent in October.

This has led economists to suggest that the SBP was well positioned to make a significant rate cut.

Trade organizations had previously called for a three to five percent cut in interest rates.

The experts also emphasized that with the rupee stabilizing and foreign exchange reserves hitting a 30-month high, the environment is favorable for further monetary policy easing.

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