As inflation fell to the first single-digit figure in over three years, the State Bank of Pakistan (SBP) announced on Thursday that the Monetary Policy Committee (MPC) has lowered the key policy rate by 200bps, to 17.5% from the current 19.5%.
September 13, 2024, is when the new policy rate will go into effect.
Both headline and core inflation dropped significantly over the previous two months, according to a central bank statement.
“The pace of this disinflation has somewhat exceeded the Committee’s earlier expectations, mainly due to the delay in the implementation of planned increases in administered energy prices and favourable movement in global oil and food prices,” it read.
The MPC observed during the meeting that these changes included inherent uncertainty, which called for a cautious monetary policy stance.
