SBP’s Monitory Policy Committee (MPC) has made this decision, saying that cut in interest rate would help uplifting the economy.
KARACHI: (UrduPoint/Pakistan Point News-May 16th, 2020) The State Bank of Pakistan (SBP) cut down its key interest rate by one percent here on Friday.
Pakistan’s central bank cut the benchmark interest by 100 basis points to 8 per cent amid ongoing situation of Coronavirus.
State Bank of Pakistan’s Monitory Policy Committee (MPC) made this decision during its meeting on Friday. The new rate, after the fresh cut, came down from 9 percent to 8 per cent.
“Inflation outlook has improved further in light of the recent cut in domestic fuel prices as tit reflection of the MPC’s decision,” said the statement issued by the central bank. By this cut, it said, inflation could fall close to the lower end of the previous rangers of 11-12 per cent this fiscal year and 7-9 per cent next fiscal year.
The central bank uses interest rate as a tool to create a balance between the inflation and economic activities in the country.
The MPC said the recent coronavirus pandemic disrupted economy and created unique challenges for monetary policy and cut in interest rate would help uplifting the economy.
The SBP reduced the interest rate by 5.25 percent since March 17, 2020.
