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SBP announces to cut key policy rate by 150bps to 20.5%

The State Bank of Paksitan last changed rates in an emergency meeting in late June last year

The State Bank of Pakistan (SBP) on Monday announced to cut its key interest rate by 150 basis points (bps) to 20.5 per cent.

The decision comes 2 days ahead of the annual budget and a week after data showed inflation slowed to a 30-month low of 11.8pc in May.

In a statement, the SBP said the central bank’s Monetary Policy Committee (MPC) had met earlier today and reviewed the current economic developments.

The committee, regarding the decision, noted that “underlying inflationary pressures are also subsiding amidst tight monetary policy stance, supported by fiscal consolidation”.

The MPC highlighted “some upside risks to the near-term inflation outlook associated with the upcoming budgetary measures and uncertainty regarding future energy price adjustments”.

According to the financial experts, the central bank would be again cautious despite room for a significant rate cut due to a large difference between the headline consumer inflation of 11.8pc and the previous policy rate of 22pc.

Saman Siddiqui

I am a freelance journalist, holding a Master’s Degree in Mass Communication and an MS in Peace and Conflict Studies, associated with the electronic media industry since 2006 in various capacities. Here at OyeYeah, I cover a range of genres, from journalism to fiction to fashion, including reviews, and fact findings. 

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