KARACHI: The State Bank of Pakistan (SBP) Thursday announced that theMonetary Policy Committee (MPC) had decided to reduce the policy rate by100 basis points to 7 percent.
This decision reflected the MPC’s view that the inflation outlook hadimproved further, while the domestic economic slowdown continues anddownside risks to growth had increased, said a statement.
Against this backdrop of receding demand-side inflation risks, the priorityof monetary policy has appropriately shifted toward supporting growth andemployment during these challenging times.
Consistent with its mandate, the MPC re-asserted its commitment tosupporting households and businesses through the COVID-19 crisis andminimizing damage to the economy.
Today’s decision brings the cumulative reduction in the policy rate sincemid-March to 625 basis points, commensurate with the decline in inflationduring this period.
Read Top Stories
The MPC noted that the take-up of several other SBP initiatives has risensignificantly in recent weeks, notably concessional refinancing facilitiesto protect employment and support the health sector as well as regulatorymeasures to provide debt servicing relief.
Together, this strong and data-driven monetary policy response shouldsupport growth and employment, while keeping inflation expectationsanchored and maintaining financial stability.
