Business

SBP brings respite to businessmen, cuts policy rate by 200bps to 13pc

Monitory Police Committee notes positive economic signals, including an increase in high-frequency indicators of economic activity

Published 3 months ago on Dec 16th 2024, 5:47 pm

By Web Desk

SBP brings respite to businessmen, cuts policy rate by 200bps to 13pc

Karachi: The State Bank of Pakistan (SBP) announced on Monday a 200 basis points (bps) reduction in its key policy rate, lowering it from 15% to 13%, effective December 17, 2024

This follows a decline in headline inflation to 4.9 per cent year-on-year in November, in line with the central bank’s expectations.

The decision was made at a meeting of the Monetary Policy Committee (MPC), which noted that food inflation and the diminishing effects of last year’s gas tariff hikes contributed significantly to the inflation slowdown.

Giving rationale of the decision, the Committee said the headline inflation declined to 4.9 percent on year on year basis last month.

President Federation of Pakistan Chambers of Commerce and Industries Atif Ikram Sheikh on Monday hailed the reduction of 200 basis points in the policy rate by the State Bank of Pakistan (SBP) , saying there is scope for further reduction in the interest rate.

President Federation of Pakistan Chambers of Commerce and Industries Atif Ikram Sheikh has expressed felicitation on the announcement of a two per cent reduction in interest rates by the Central Bank and said that the next monetary policy announcement may reduce by 400 basis points, said a press release issued here.

He hoped that in the coming six months, the policy rate would be reduced by 9 per cent. Atif Ikram Sheikh said that the reduction in the policy rate will increase economic development, the currency circulation including investment, exports will also increase, and the reduction in the interest rate will also reduce the internal debt of the government.