Friday, March 24, 2023

State Bank Cuts Interest Rate By 2 Percent

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ISLAMABAD – State Bank Cuts Interest Rate By 2 Percent. The State Bank of Pakistan, on Thursday, has cut its key interest rate by two percent. The new rate has come down from 11 percent to 9 percent.

According to details, the State Bank’s Monetary Policy Committee announced this in a statement. Their decision was to cut the policy rate by a further 200 basis points to 9 percent. This reduces forward looking real interest rates to around zero. These are the policy rate less expected inflation.

In January, the SBP  left the interest rate unchanged at 13.25 percent. The SBP announces a target rate every two months, which serves as the benchmark interest rate for overnight funds in the interbank market. It is one of the tools the central bank uses to ensure price stability in the economy.

The interest rate has been reduced keeping in view the coronavirus situation in the country. The interest rate declined by 4.25 percent during one month. Earlier, the SBP announced that it will provide loans to health facilities on 3% markup to counter coronavirus outbreak.

The SBP declared that inflation rate will come down in the coming months while the prices of petroleum products will also decrease. Local businesses and exporters have lately been protesting at high borrowing costs, which they said was harming investment.

State Bank Cuts Interest Rate By 2 Percent.

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