Islamabad, September 12, 2024-The State Bank of Pakistan has announced a new monetary policy, reducing the key interest rate by 200 basis points to set it at 17.5%. According to a statement from the central bank, the Monetary Policy Committee decided to lower the policy rate by 200 basis points, considering various factors affecting inflation. The committee observed that the real interest rate remains significantly positive, which is expected to help bring inflation down to the target range of 5-7% over the medium term, while also ensuring macroeconomic stability.
Economic stakeholders were closely monitoring the decision on interest rates. While many financial experts had predicted a modest cut, the business community had been demanding a more substantial reduction to boost economic growth. A report released yesterday indicated that financial analysts expected a reduction of 150 basis points, though some predicted a cut of up to 200 basis points. However, industry leaders were pushing for a more significant cut of 500 basis points to accelerate economic growth.
