The State Bank of Pakistan (SBP) has announced a cut to its key policy rate by 250 basis after inflation dropped to single digit.
“At its meeting today, the Monetary Policy Committee (MPC) decided to cut the policy rate by 250 basis
points to 15 percent, effective from November 5, 2024″, the bank said in a statement.
“The inflation has declined faster than expected and has reached close to its medium-term target range in October,” the SBP’s Monetary Policy Committee (MPC) noted, adding that “the tight monetary stance continues to play an important role in sustaining the downward trend in inflation.”
Earlier, it was reported that the State bank would reduce its policy rate by 200 basis points in its meeting.
When there was increase in inflation, the SBP had raised its policy rate from 7 per cent in August 2021.
Inflation in 2025
It is pertinent to mention that inflation could pick up again in 2025, driven by electricity and gas price increases after a new $7-billion IMF bailout, and the potential impact of taxes on the retail, wholesale and the farm sector announced in the June budget to take effect in January 2025.
