As inflation stays in the single digits through October, the State Bank of Pakistan (SBP) dropped the key policy rate for the fourth time in a row on Monday, lowering it by 250 basis points (bps) to 15%, which was at least 0.5% higher than the market had anticipated.
As inflation eases off recent record highs, authorities continue to work to stabilize a weak economy, and analysts and independent economists generally expected the central bank to further reduce its main interest rate at its policy meeting.
The Monetary Policy Committee (MPC) of the SBP stated that “the tight monetary stance continues to play an important role in sustaining the downward trend in inflation.” The MPC also pointed out that “the inflation has declined faster than expected and has reached close to its medium-term target range in October.”
