SBP slashes interest rate to 11% amid coronavirus outbreak

SBP slashes interest rate to 11% amid coronavirus outbreak
Karachi: The State Bank of Pakistan on Tuesday slashed the interest rate by 1.5 per cent to 11% to facilitate business community amid novel coronavirus outbreak in the country.

The SBP said in a statement, “Globally, the Coronavirus has severely increased in reach. This has caused major disruptions to economic activity and the IMF has also significantly downgraded its global growth outlook for 2020 from 3.3 percent growth previously to below zero”.

It further added that the uncertainty have also led to a sharp fall in international trade.

“On the domestic front, since the last MPC, the number of COVID-19 cases has increased considerably, prompting social distancing and curtailment of activity. This is expected to lead to noticeable slowdown in domestic demand”.

After reviewing the situation, the Monetary Policy Committee (MPC) has decided to cut the policy rate by a further 150 basis points to 11 percent.

This brings the cumulative easing over the past one week to 225 basis points. The MPC was of the view that this cumulative easing would cushion the growth slowdown while protecting inflation expectations.