Karachi (Staff Report): The State Bank of Pakistan on Thursday slashed the interest rate by a significant 200 basis points to 9 percent.
“The MPC decided at its emergency meeting today (Thursday), to cut the policy rate by a further 200 basis points to 9 per cent. This reduces forward looking real interest rates (defined as the policy rate less expected inflation) to around zero, which is about the middle of the range across most emerging markets,” the central bank said in a statement.
“The MPC was of the view that this action would cushion the impact of the coronavirus shock on growth and employment, including by easing borrowing costs and the debt service burden of households and firms, while also maintaining financial stability. It would also help ensure that economic activity is better placed to recover when the pandemic subsides,” it added.