State Bank of Pakistan Monetary Policy New Rate announced

State Bank of Pakistan Monetary Policy New Rate announced

KARACHI: The State Bank of Pakistan (SBP) Thursday announced that the Monetary Policy Committee (MPC) had decided to reduce the policy rate by 100 basis points to 7 percent.

This decision reflected the MPC’s view that the inflation outlook had improved further, while the domestic economic slowdown continues and downside risks to growth had increased, said a statement.

Against this backdrop of receding demand-side inflation risks, the priority of monetary policy has appropriately shifted toward supporting growth and employment during these challenging times.

Consistent with its mandate, the MPC re-asserted its commitment to supporting households and businesses through the COVID-19 crisis and minimizing damage to the economy.

Today’s decision brings the cumulative reduction in the policy rate since mid-March to 625 basis points, commensurate with the decline in inflation during this period.

The MPC noted that the take-up of several other SBP initiatives has risen significantly in recent weeks, notably concessional refinancing facilities to protect employment and support the health sector as well as regulatory measures to provide debt servicing relief.

Together, this strong and data-driven monetary policy response should support growth and employment, while keeping inflation expectations anchored and maintaining financial stability.