State Bank of Pakistan Announces the Fifth Rate Cut in the Past Three Months

Following a meeting of the Monetary Policy Committee (MPC), the State Bank of Pakistan (SBP) announced it had lowered its policy rate by 100 basis points, bringing the rate down to 7%.

Marking the fifth rate cut in the last three months, since the COVID-19 pandemic started, the SBP stated that the rate cut reflected a further improvement in the inflation outlook, although the domestic economic slow-down continues. The SBP also added that the downside risks to economic growth had increased.

The SBP further stated that given receding demand-side inflation risks, the focus of the monetary policy had now shifted in-line with supporting economic growth and employment in the wake of the C...