The State Bank of Pakistan (SBP) announced on Monday a significant decrease in its policy interest rate by 200 basis points, bringing it down to 13 percent. The new rate will take effect on December 16, 2024, according to an official press release following a meeting of the central bank’s Monetary Policy Committee (MPC).
This marks the fifth consecutive rate cut by the SBP, reflecting a cumulative reduction of 900 basis points over the last five monetary policy meetings. The move aligns with the central bank’s ongoing efforts to stimulate economic activity amid challenging economic conditions.
Analysts interpret the sustained reduction in interest rates as a strategy to ease borrowing costs for businesses and individuals while providing a boost to investment and consumption. The SBP noted in its statement that the decision was guided by evolving macroeconomic indicators, with a focus on promoting growth while ensuring inflation remains manageable.
Market observers are expected to monitor the impact of these measures closely, particularly on sectors such as manufacturing and real estate, which are sensitive to borrowing costs. This latest reduction underscores the SBP’s commitment to supporting the economy through accommodative monetary policies.
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