State Bank of Pakistan Reduces Policy Rate as Inflation Shows Signs of Cooling
SBP Reduces Policy Rate
The State Bank of Pakistan (SBP) has taken a decisive step by reducing the policy rate by 100 basis points, bringing it down to 19.5%.
Reasons for the Rate Cut
- The recent cooling down of inflation rates.
- Improved foreign exchange reserves of the country.
Current Economic Indicators
As noted by the SBP governor, the current account deficit has narrowed sharply in FY24, indicating a positive shift in fiscal health.
- Foreign exchange reserves increased from $4.4 billion to over $9 billion.
- The MPC projects FY25 real GDP growth between 2.5% and 3.5%.
Conclusion
These moves indicate a strategic adjustment in the SBP's monetary policy aimed at fostering a stable economic environment while addressing inflation concerns. The gradual improvement in the overall economic indicators signals potential for positive growth in the near future.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.