*ISLAMABAD – **State Bank of Pakistan announces key interest Rates for thenext two months.*
*The State Bank of Pakistan slashed its key interest rate by 75 basispoints to 12.50% on Tuesday. *
*The central bank cited deceleration in domestic food prices as the reasonfor cutting the policy rate.*
SBP said that the outlook on the headline inflation, a measure of the totalinflation including commodities such as food and energy prices, remainswithin its earlier forecast range of 11% to 12%
The official statement attributed the cut to the central bank’s efforts inaiding healthcare and trade amid the coronavirus pandemic. It noted thatthe viral outbreak has caused a slowdown in the global economy and alsoprecipitated an oil crisis.
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The press statement read that the present volatility faced by the Pakistanimarket is externally driven and as soon as the risk posed by COVID-19subsides, the volatility will dissipate.
However, market experts, on the eve of the policy announcement had varyingideas based on their rationale.
