In response to calls for a large interest rate decrease, the Monetary Policy Committee (MPC) of the State Bank of Pakistan cut the key policy rate by 200 basis points, from 19.5% to 17.5%. On Thursday, this decision was made public.
According to a statement issued by the SBP, “the Monetary Policy Committee (MPC) decided to reduce the policy rate by 200 bps to 17.5 percent in its meeting today,” adding that it took into “account various factors impacting the inflation outlook.”
Analysts for financial markets had projected a more restrained decline of 150–200 basis points. The MPC’s impending decision is especially important because it comes after several months of cuts totaling 2.5 percentage points.
